One of the most universal suggestions for becoming a better binary options online trader is to come up with a trading plan. I have written a couple of articles in the past that have focused on this, including 10 Elements Any Keyoption Plan Should Include and 8 Steps to Troubleshooting a Broken Trading Plan.
If you are in the process of drafting up your own trading plan, I highly recommend you take a look at both of these.
I have come to realize however that most of the articles I have seen on trading plans (as well as the two above) are missing something important. Trading plans tend to focus on … well, trading. That makes sense, right? It is a trading plan after all. Most trading plans are full of rules for scheduling trades, entering trades, exiting trades, and what you should do while you are in the middle of trades.
But lately I have been thinking about what the life of a trader is really like. Unless you are a scalper (and often even then), your day-to-day business is not going to be brimming with fast-paced, ongoing action. You are going to have a lot of downtime where you are not actively trading. That is just the nature of the beast. Trading well involves a lot of waiting. You will often spend hours at a time trying to restrain yourself from sub-par entries.
And as I mentioned in another post, trading can even get boring if you are doing it right, but it can become a real problem. It is the same experience that so many players at the poker table experience. You start to get the suspicion that there is profit out there to be had, and you are just sitting there while others blaze by, taking it. Desperate to get in on the action, you trade.
More often than not, when you trade impatiently, you fail. You have to break your own rules to get in, and that means getting out at a loss.
There are also times in your life as a trader when you are going to be getting out of live trading for an extended time period. Sometimes you have serious drawdown in your account and you need to get out for a while as you troubleshoot the problem. This is also a period where you may experience frustration and temptation. In fact, both can be even worse than they are on a day-to-day basis!
Trading Plans Need to Ward off the Temptation to Overtrade
Anytime you place a trade that falls shy of your criteria—even if it is still “pretty good”—you are overtrading. It does not matter if you would grade the trade as a “B++.” If you would not take that same trade when you are not feeling impatient, you have ultimately taken the trade because of your emotions, not because your system told you to.
For many binary traders, this temptation to overtrade, to do something can be overwhelming and expensive. This is why I think trading plans need to not only focus on what you are doing when you are actively trading, but also what you should be doing when you are not trading.
Since I am talking about two distinct situations, I want to cover each of them separately. What goes into your plan will depend on your own personality and your specific approach to trading, but I want to at least give some ideas.
8 Things You Should Do When Waiting for Trades
First, I want to talk about the day-to-day scenario where you are sitting on your hands because you just have not spotted that perfect trade. Sometimes this can go on for a matter of hours, while other times you may be faced with days or weeks where you are not going to be actively engaged in any live trades. Here are some ideas for what you can be doing with that time.
1. Read about trading. This is always a great option for when you are sitting around waiting, because you can do it in fits or starts. Whether you end up waiting around for hours for a trade or just for a few minutes, you can fill up that time by reading. You’ll be distracting yourself from the urge to overtrade, and you will be learning instead of just killing time!
2. Watch videos or tutorials. This is something else you can do sporadically as you need to since you can always hit “pause” if you do have a trade opportunity come up. Videos are awesome for visual and kinesthetic learners, but there is no denying that watching them is time consuming. Since you have the time, why not use it? Plus, watching examples of A+ trades while you are waiting for your own is a great reminder of why you do not want to settle for B trades!
3. Attend webinars. If you are pretty sure that nothing is going to be happening for a while (maybe you take long-term trades, and it will take hours or days for a setup to form), why not attend a live trading webinar? You can join other traders as share the learning experience. You never know—you may come away inspired to test a new strategy or take a new approach to your trading.
4. Delve deep into a certain indicator or price pattern. Personally I think this is one of the best uses of downtime. A lot of traders never do it, but you have to eventually if you want to be a real expert. Basically what you do is this. Take your system apart. Write down every indicator or element involved with it. Then scroll back to the beginning of the charts in your platform (i.e. MT4). Take just one indicator or element and move through the charts taking screenshots of the best examples. Take screenshots of poor examples too and mark them properly. Study all of these charts. Save them to your hard drive for quick reference. They will help you to tell A+ setups from B setups. This requires a ton of patience, but it pays off in dividends.
5. Learn a new trading method. If you have no clue what to do with your time, why not get online, search for a trading method you have never tried, find one that looks like it might suit you, and learn how it works? Most of the systems you learn you will probably never use, but you never know when you might find something incredible. Even if you do not use it as it is, you might end up borrowing components of it for your existing method or a new one that you invent from scratch.
6. Test a new trading method. This falls right in line with the suggestion above. If you find an exciting trading method, consider giving it a test run. Backtesting and demo testing both can consume a lot of time, so if you have it, you might as well use it!
7. Tweak and test an old trading method. If you do not find any new methods to try out, or you just do not want to test any, then think about possible improvements you could make to your current method. If there are any experiments you have wanted to try, now is a perfect time. Remember, never go live with experiments; always test them first. By the time you use any adjustments live, they should no longer be in the experimental phase—they should be proven.
8. Chat with other traders. Think about getting outside your shell and talking with your fellow binary options online traders on forums or on social networks or Skype groups. There are a lot of other traders who are probably using some variation on your system. These people can help distract you and educate you when you are frustrated or bored.
It really is one of the ironies of trading that this occupation involves mountains of tasks which many traders feel like they simply “do not have the time for.” Yet those same traders often struggle with their impatience during times of forced waiting for setups to form. Why not kill two birds with one stone? You can solve both problems at once by using all that dead time to take on some of those other chores!
