Hello friends! For any of you who have been playing longer, or maybe just want to try it on Stockity, you must have heard of-or have actually experienced-something which is called a “loss”. Yep, if we play Binary Options, or trading in general, we don’t always get continuous profits. Sometimes we will run into some kind of losses that make us panic. But this needn’t be a cause for alarm, since this loss can prove to be the best teacher if experience has to teach us a lesson.
Sometimes, in case of a loss, one blames the market or thinks: “I don’t think I’m lucky anymore.” Whereas, actually it is of prime importance for us to know what could have been the causes of this loss so we can evaluate it. For example, was it because of not using correct analytics just opening a position? Or because you don’t have discipline with money management? You can, therefore, do a better strategy when you know what has caused it.
For example, it suddenly reverses after having entered at the upper price to buy a position. You lose. Maybe because you do not understand overbought and oversold. So, learn the indicators which can help you to see when the right time to buy or sell, such as RSI or Bollinger Bands. Therefore, do not directly blame the market!
At Stockity, there are many choices of assets that we can trade in. But, that doesn’t mean we have to just guess. In fact, most beginners do not analyze by using indicators. As a matter of fact, indicators are really important to help you view opportunities and risks.
You can try to use indicators, such as MA or BB. Let’s take MA as an example – MA10, or MA20-it will allow you to see short- or long-term trends. If the price is above MA10, it means an uptrend has occurred. Vice-versa, when below MA10, it signals a downtrend. It will also help BB to know when the price is on the top or bottom, which can mostly provide a signal related to buying or selling.
People often get trapped in the thought, “ah, just use a lot of capital this once so you can make a lot of money.” As a matter of fact, this is really dangerous if not at a lucky position or in a wrong position. Trading is not about one big profit but about how to keep making money. So money management is the most important thing!
One of the rules you can apply is the 1%-5% rule. For example, from the total capital try to trade in only 1% to 5% in each position. Suppose your capital is IDR 1,000,000; that means it would be ideal if you only use IDR 10,000-IDR 50,000 for one position. What’s the purpose? So, once or twice if you lose, you don’t immediately run out of capital. This way, you will toughen up and learn something from every position that you open.
It is a mistake to over-trade or open too many positions, which will make one’s capital run out quickly. Usually, this kind of over-trade is rooted in emotions. For example, you are so happy because of continuous profits or annoyed since you just suffered a huge loss, and you continuously open a position. Actually, this is not a wise way to gain a profit.
If one has just profited, try to restrain oneself from immediately opening another position. Take a short break and look once again at the analysis and review the position one has opened. In case of a loss, try first to quiet oneself, not to get more emotional, and overtrade.
Applying your strategy to a demo account before using any real capital does not raise any problem. From Stockity, there is the availability of using a demo account for practice. You can implement your strategy, analyze indicators, and also perform money management without exposing yourself to the risk of losing real money.
For example, you have learned the combination strategy MA10 and BB20 that you want to try. You test it by seeing what results using a demo account will be. Is this the kind of strategy that will work with certain assets or not? From this, you can see and make improvements before the real account is used.
Guys, trading bears risks, and we must have experienced losses. But instead of giving up, let this loss be the teacher that teaches you to be a better trader. Apply all the tips above and remain disciplined with respect to your strategy and money management.
Trading has always been a long journey; it does not matter how fast you profit from it, but how you can continuously create profit in the long run. Hopefully, this article will help and may your trading be smoother!
