All who trade binary options are encouraged to track not only their success rate, but also profits and losses. This should not only be done for money management purposes, but also so as to be able to identify certain patterns in relation to your overall success. Before problems can solved, they first have to be identified. Keeping a detailed record of both wins and losses will prove quite valuable.
The most important reason for tracking profits and losses will be to always know if your profits are exceeding your losses. The goal of all traders is to earn money, and if you are not, some changes are necessary. Your specific win/loss rate will provide some insight, but due to the fact that investment amounts and payout rates vary, this data alone will not tell you whether or not money is being earned. Only the profit and loss numbers will tell you this.
Some binary options brokers do offer traders the option to download past results. This data will most likely include not only specific trade results, but also the specific financial details of each trade. When a download is not available, this information can be accessed on the broker website by going into your account section. So as to not become overwhelmed with the process of tracking, consider making note of this information daily.
Depending on which broker you choose to trade with, refund rates may need to be factored in. These are small percentage rates (calculated based upon the investment amount) that are offered when trades finish out of the money. These refunds typically range between 1% and 15%. A sell option feature can also impact earnings when used. This feature can be used to close a trade early, either securing some amount of earnings, or reducing the amount of a prospective loss. Sell amounts should be listed along with all other closed trades, and should be easy to access.
There are several methods that can be used to track profits and losses. Some traders choose to keep track of this information on paper, while others use a computer spreadsheet or other similar file. The method used is not important as the tracking itself. The review of this information is important as well. So as to stay on top of your progress, consider reviewing this data on a daily, weekly, and monthly basis. Not all days will be good days, so there is no need to fret over single days. Instead, look at the bigger picture to determine how well you are doing.
There are tools which can be used to provide different perspectives of profits and losses, such as graphs or other charts. Such tools will make it easier to spot trends, both positive and negative. With so many opportunities to choose from each day, it can be easy to get so caught up in the actual process of trading that financial details become overlooked. The best course of action for all who trade binary options is to develop a plan for profit and loss tracking and use it without fail.