It is impossible to profit from every binary options trade. However, it is not impossible to recover from a loss streak, or single losses which negatively impacted your trading funds. There is no denying the fact that losses are frustrating, but know that all traders, regardless of experience level, do have bad days. The following information will help you to quickly and effectively restore your account funds to a suitable level.
First things first – you have to be actively trading in order to recover losses. It is the natural tendency of most to stop trading when losses occur. Taking a short break is not a bad idea, but at some point you’ll need to resume trading in order to recover from losses. Trading can be quite the emotional experience, with feelings ranging from dejection to elation (and everything in between) being felt. If emotion is causing problems, it would be wise to learn how to stop making decisions based upon feeling, and act only upon facts.
Money management is absolutely necessary in loss recovery. Consider using strategies such as compounding. This strategy involves selecting a set percentage of account funds for investments. With each winning trade, the investment amount grows. With each losing trade, it decreases. This is one of the most solid methods to use over the long term. However, it can also be quite helpful when trying to quickly recoup losses so long as you’re trading well, which brings up another point…
If the number of losses that you are experiencing greatly exceeds the number of wins, problems exist that must be corrected. Although investment amounts and payout rates do vary, as a general rule, you’ll need to be winning at least 60% of your positions in order to be a profitable trade. The win rate will need to be even higher than this for a period of time in order to quickly recover losses. Don’t know what your win rate is? Take stock of your closed positions and get the answer. Then take a closer look at losses and try to determine why those positions did not finish in the money.
New traders are among those most likely to struggle with loss recovery. Many first-time traders start out with a small amount of funds and do not take the time learn how to trade binary options properly before getting started. If this is you, and you’ve drained your trading account, a subsequent deposit will be required in order to recover losses. Not happy with your broker? Now will be the time to choose a new broker. It may be that you need to have access to a better variety of assets, expiry times, and instruments in order to be successful.
Losing money is never fun, but take heart, a few simple changes and some strict money management may be all you need in order to recover from losses. Binary options trading should not be viewed as a way to get rich quick. Truly successful traders build up their profits over time, devoting time and effort to carefully selecting and analyzing each trade. Make this approach your own, and future success is virtually guaranteed.