Application of Monte Carlo Analysis

Application of Monte Carlo Analysis

This article is about Monte Carlo Analysis (often abbreviated to MC or MCA), of course, not about the country of luxury yachts and super rich people. Monte Carlo Analysis (MCA) has been one of my favorite tools since the very beginning, perfectly fitting my rather conservative trading style.

So, what is it about? It is a very simple tool that can help you manage your risk in a better way, prepare you for realistic trading scenarios (I wrote about this in another important article) and give you a realistic estimation about how big your trading account should be. Remember, the only thing you can really control in your trading is risk. Therefore, you should be damn sure you do it really well! I was very fortunate to come across MCA in a very early stage of my trading career. I have already been using MCA in my past; when I had been using a quite simple discretional day trading system (more than 10 years ago). Since then, I've developed very important habits to use MCA for every new system, my overall portfolio, and for making important risk-related decisions.

How exactly does MCA work and how do I use it?

The MCA principle is very simple: Its goal is to take all the trades from your backtest (backtesting is the very first and highly important step in a successful trading. I've always been backtesting extensively, even when trading discretionary and using only Excel spreadsheet, putting all the trades into it manually) and randomly shuffle the order of the backtested trades many, many times (even up to 10.000 times) to see different outcomes of my trading results and trading equities when the order of the trades is different from backtest results. Why? Simply because the future order of your trades will very probably be highly independent of the past order! In other words, get ready for your future trading equity to look much different than the backtested equity - because the order of your trades will be different as well! And although your trades will be similar in its nature, the different order of wins and losses will produce significantly different characteristics than the "static" backtest - especially characteristics like Maximum Drawdown (among others). Many beginners are surprised when their live trading equity looks different than the backtested one and they often think that their system might be broken, but it often looks this way just because they haven't performed the MCA and aren't ready to face the reality!

So, let's be more practical here and see some examples. In general, you can perform an MCA in an Excel Spreadsheet (I'm sure there is MCA in Excel on the internet), or use some more advanced, commercial tools, like Market System Analyzer, which I often use.

In its essence, it usually works like this:

You take all your backtest results, the more, the better. If you have just your P/L values of all your trades, that is sufficient.

You randomly change the order of all your backtest trades (you "shuffle" your results). With the trade order changed, there will be a different worst case drawdown than the one you have from your backtest results. You'll note down the value of the new maximum drawdown obtained from the randomization of the trades order.

You repeat this process many times. The required minimum is 500 times. However, my heavy testing of MC concepts shows that you should use many more iterations - preferably 10,000.

Now you'll have 10,000 different variations of the worst drawdown (each iteration will produce a different worst max drawdown value). What you need to do, is getting a so called "95% confidence level".

It simply means that you'll sort all those 10,000 different values of the worst possible drawdown from the smallest to the biggest. Now you'll find the line number 9.500 and that drawdown value you find on this line is the one that represents the 95% confidence level.

And this is "your number". This is the real worst possible maximum drawdown, which you'll probably experience in the future (in live trading). This is the number you need to be prepared for and to use for your capitalization. When this maximum drawdown is exceeded by even a bigger one in real-time trading, you should seriously start questioning your strategy - its lifetime might be at its very end.

As I already said, MCA is an absolutely essential and crucial concept for my trading. I use it, in many ways (new and creative) every day. It's the most important part of a workflow for any serious trader. It's the best (and perhaps the only) way to build a bulletproof defense for your trading. Don't fight this concept. It's one of the most important concepts in trading. I've been extremely lucky to use it since almost the beginning of my trading career.

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For more trading related articles, free eBooks or to find out how am I building my own hedge fund, go to http://www.systemsontheroad.com/blog

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Which Is the Best Binary Options Broker of Them All?

Which Is the Best Binary Options Broker of Them All?

The Best Binary Options Trading Websites

When you commence trading on all these thrilling options, it will be necessary to choose a broker who will provide you with a fast and simple way to trade. The top brokerage firms specialise in different areas, which could include having one of either a big or small selection of trading options. Any broker worth talking about out there should include the following basic options:

• Analysis of price movements in the market

• A Choice of Stocks, Commodities, Forex and Indices

• Signals Tools

• Memberships that fit in with your trading requirements

Reputable online brokers are also known to offer an archive of study materials including ebooks and videos. Though it can be helpful to have a wealth of educational sources to get stuck into it is not the sign of a better broker.

Please consider that binary options are not like trading on the stock market. In the binary market traders are not buying any assets, but instead predicting asset prices. This is why this strategy is so popular.

Investigating which is the best binary options broker for you is a must so if a broker seems to be unnecessarily complicated or tells you to study charts and graphs for hours on end before you start then take a look at a different one that's simpler to get going with!

Choose The Best Broker for You

Because you can find a plethora of binary options brokers online, it can be difficult to find one to suit your budget and experience level. To aid you, browse through a few reviews of some of the standout trading setups in the industry, including some of the features that each one offers. We consider this to be vital to your comprehension of what separates the best binary options brokers from the worst so that you can be more confident before you begin to invest your own hard earned money.

Every broker offers various assets. Make sure that you work with an asset that you are both knowledgeable of and confident enough to predict the price fluctuations. Having lots of assets is a not a bad thing, but if you are going to only trade on a small number of assets it's not important if the broker has a thousand others listed on their site.

Below are a few additional useful points that you should think about when you are considering which is the best binary options broker:

• Withdrawal Speeds - even if you are racking up a huge portfolio of great investments, if you can't access your returns - what is it all in aid of?

• Stable Interface - with no spreads and no time delay. Watch out for brokers that are fixing the price feed in their favour - they do exist. so be wary.

• Customer Service - must always be readily available during trading times.

These are three of the most important factors that help outline the best binary options brokers. Only brokers that stick to all of these requirements should be taken into consideration. As well as looking into our own experiences, these are also the opinions of professional traders.

Yet when all is thought through, be reminded of the following: we have yet to come across a method of trading that has a 100% success rate, so be prepared for the fact that you will not achieve a return on every one of your trades; you should try to spread your chances so that you have more winning than losing ones.

Binary options trading is a game of probabilities, which means that you need to balance the risk and try to keep the odds in your favour.

Ensure that you have researched your asset and how you are going to play out your game plan and you will see good results. Be sure to test out your method to understand whether you have prepared enough- only then should you start trading binary options with real money.

To learn more about Binary Options welcome packages from the best Binary Options Brokers in the industry head over to Binary Bonuses.

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Support and Resistance Basics for E-Mini Trading, Part 4 Breakouts and Breakdowns

Support and Resistance Basics for E-Mini Trading, Part 4 Breakouts and Breakdowns

I have to stress that determining where and what composes support and resistance is of utmost importance. Further, understanding support and resistance (SAR) allows a trader to make trades where other traders are likely to buy or to sell. My primary tool in e-mini trading is support and resistance, which is enhanced by an understanding of several different views of volume using order flow. For the most part we will talk about what happens when market price reaches support or resistance and bounces off those lines. That being said, it doesn't always bounce off SAR and sometimes breaks out or breaks down and can go for a pretty good distance, right? Your answer should have been it will probably move to the next stopping or starting line (SAR).

In my experience, the majority of price moves result in a bounce off known strong support or resistance; but, there is another possibility and that possibility is that price can continue through our lines and breakout or breakdown. There is one instance in which I never trade breakouts or breakdowns because of the low probability of success; I generally pass on trading breakouts of breakdowns into new high and new lows. Generally speaking, my experience with new high/low breakouts is their general propensity to result in a failed trade as the market gives the trader a good head fake and then bounces and turns the other way; ouch! That being said, here are some ideas for consideration when price appears in a position to pierce support and resistance:

· What has to happen in order for the resistance/support to fail? (volume, are traders on the bid or the ask side of the order flow?)

· What has to happen to see the price rejected at resistance/support? (volume, order flow)

· What is the context of the market? (is it a bracketed market or is it trending?)

· Is there room for the breakout/breakdown to move for a reasonable profit or is there further support or resistance that will hinder a significant move?

In this article we looked at breakouts and breakdowns and some of the conditions that need to be present to successfully trade each move. I stated that I am usually less than enthused to trade breakouts/breakdowns into new highs or new lows. Finally, we added some specific questions you might want to consider when taking a trade in the world of SAR.

Would you like to start earning 300% every week? So would I... yet you see this type of hype on many sites these days. I don't promise astronomical returns, but 25 years of Wall Street trading experience has helped churn out solid e-mini traders for 5 years. Come see me trade. Real trading doesn't lie. Click here for a free visit to my trading room and see for yourself.

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Support and Resistance Basics for E-Mini Trading, Part 2

Support and Resistance Basics for E-Mini Trading, Part 2

I recently wrote an article on the subject of support and resistance (SAR) that was published and have received an unusually high number of enquiries on the subject. First of all, let me say unequivocally that the mother lode of trading proficiency lies in identifying SAR and understanding how to trade these lines. In my mind, there is nothing more to trading than understanding the structure and context in which the e-mini contract is trading; most important in understanding the structure of the market is to identify where real support and real resistance can be found. By real support and resistance, I am inferring that I have no use for floor pivots, Murray Math or any of the host of predictive SAR tools. I want real lines to form and then I know, for sure, exactly where real stopping points are located.

You can safely say that I am a reactive trader, not a predictive trader. I am also an e-mini scalper. I need to stress if you are going to be a reactive e-mini scalper it is absolutely essential to use real-time indicators because lagging indicators will, by definition, find you entering trades 8-10 ticks late. Entering e-mini scalp trades late is the recipe for disastrous trading and, in my opinion, is the leading cause of novice trading failure. It is important to point out that my theory about lagging indicators and novice traders failing is my opinion and is not a statistically confirmed statement.

Now let's talk a bit about indicators, which if you read some of the popular websites, especially one that recently changed its name, are the absolute answer to your trading needs. In my world the only useful purpose indicators provide is to help me filter out undesirable trades. This relegates indicators to a role of filtering out good trades and bad trades when you reach an area of where known support or resistance resides and even then they are not particularly helpful because real-time trading and lagging indicator seldom sync together in a coherent fashion.

Finally, in a zero-sum trading environment volume becomes your best friend. In futures trading there is a winner and loser on every single contract. So, in order for you to win someone has to lose. However, volume and order flow volume will usually tell you all you need to know as to whether a given market move has the strength to pierce our lines. Generally speaking, the higher the volume at SAR the more likely price is going to reverse and conversely, low volume usually indicates that most of traders are on one side of the contract and there is a high probability that the price will continue through our support and resistance lines. In short, if you can identify the price action stopping points on your trading points, you have a great chance for success.

Would you like to start earning 300% every week? So would I... yet you see this type of hype on many sites these days. I don't promise astronomical returns, but 25 years of Wall Street trading experience has helped churn out solid e-mini traders for 5 years. Come see me trade. Real trading doesn't lie. Click here for a free visit to my trading room and see for yourself.

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Binary Options Explained

Binary Options Explained

What is Binary Options Trading?

Binary Options is a trading format that has only two final outcomes. Traders are able to make good returns by simply trading on these two outcomes.

Choosing "High" or "Low" is the most popular outcome. Before the start a period of time needs to be fixed before a trade can be placed. When the time frame has ended the asset price will either be higher or lower than that fixed at the outset. If the prediction is correct and the asset's price at the end of the time of expiry is on the correct side of the initial or "strike" price, the trader will receive a return. If predicted incorrectly the amount invested will be lost.

The Ease of Binary Options Trading

Usually when investing in assets investors look to buy a quantity of a stock. That is what we mean when we say that someone has shares in a product or an investor is a shareholder in a company.

The asset price is measured in the individual share price. Profits are made when the trader sells his asset back at a higher price than that at which he purchased the asset at the outset. Similarly, a loss will have been made if the asset's selling price is less than the price it was purchased for.

For this kind of trading it is necessary to possess a huge amount of understanding of a broad number of variables. A trader would need, for instance, to have studied the previous performance of an asset, how the said asset tends to react to events in the market that cause its price to change and, then, most importantly in terms of investment placing, to make educated forecasts on the future movements of the asset price.

Downturns in the market are nothing unusual and we can see on the news how many changes take place across the world's financial markets from day to day. To make good use of all of these variables the trader who manages to place successful trade after successful trade knows and understands asset price changes and has a resource of trading strategies that can be applied quickly to given situations up his sleeve.

By neglecting all of these considerations you risk experiencing your very own personal crash. What you have set aside for investing will likely as not evaporate, you won't have enough money to buy presents for the kids at Christmas and your partner may run off with someone considerably more successful at trading than yourself|

Unlike stock market investments with Trading Binary Options purchasing assets or stocks in a business is not required. What was mentioned before was that your trades are based on the movements of an asset price and if the price of an asset will rise or fall. In this case you are trading on an up or down movement in the price of an asset. Notably enough, Binary Options Trading helps potential investors get up and running without having to lay out huge sums of cash, because the required investment amount can be much smaller.

Look at the commodity Gold which has a market value so high that very few people actually acquire any stock in Gold. If you are trading in the Binary Market you do not need to purchase any gold, instead you are making predictions and investing based on whether the value of Gold will increase or decrease.

Which Assets are Good for Trading as Binary Options?

We are now at the stage where we are starting to think about commodities; in the previous instance we touched upon Gold. So, without too much jargon it's worth taking a look at the types of assets that are used in Binary Options Trading.

- Indices - An index is the stock exchange itself. The NYSE is in New York, the FTSE is located in London and along with these two is the NASDAQ. One can make trades on the value of the market place at the start and end of trading!

- Forex - Is to do with major world currencies, like the US Dollar (USD) or the Japanese YEN (JPY) Trading on currency pairs can present quick and highly lucrative investment opportunities.

- Commodities - Could be either something extracted, for instance, coal or gas or something that is cultivated such as cocoa or livestock.

- Stocks - We talked about purchasing shares earlier on, these could be shares in a company or a business such as Walmart or HSBC.

Researching your chosen asset is where you begin before you commence trading. Although I explained that one of the major lures to Binary Options Trading is the ease and speed with which you access the trading markets it is a major advantage if you keep up to date with how your asset fairs in the market. If the fluctuations in the price of Copper are of interest to you, it would probably make sense to use Copper as your chosen binary asset. It stands to reason then, that the more up to date you are with the price changes of your asset in the market, the more likely you are of successfully predicting the direction of the price movement.

When trading binary options always be sure to use the best and most respected brokers in the industry. For up to date reviews, news and trading tips on Binary Options and Binary Options Trading take a look at Binary Expert.

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What Do You Know About Correlated Markets and E-Mini Trading?

What Do You Know About Correlated Markets and E-Mini Trading?

One of the best tools that e-mini traders possess is the ability to look at correlated markets and profit from them. I should point out, at this point, that there is no 100% correlation between 2 given markets, but many markets are related to each other and can be useful and determining future price movement on the contract you are trading. You can add a great deal of confidence to your e- mini trading by learning which markets are related to each other (either positively or negatively) and how those markets might help in determining potential e-mini trades.

· The markets are positively correlated.

· The markets are negatively correlated.

· The markets are non-correlated.

I personally enjoy trading positively correlated markets and use this tool to my advantage nearly 100% of my trading time. Negatively correlated markets can be just as useful and certain contracts can be identified that have very strong correlations to each other. On the other hand, a non-correlated market is of little use to the average trader because they supply little or no information that will be useful when trading.

I am a very active NASDAQ futures trader and the Russell 1000 (and other Russell contracts). I truly enjoy this pair of correlated markets. Most of the time, there is a strong positive correlation between the NQ and the Russell contracts. Why? It's pretty simple; most of the stocks in the Russell index are on the NASDAQ exchange. In my experience, the NQ generally leads the Russell indexes; so you will find yourself taking and NQ trade and then a subsequent trade on the Russell. One word of caution, however, before you jump into and NQ and subsequent TF trade make sure that the positive correlation exists on the NQ and TF exists before trading. It is not unusual, though not common, for the Russell index to have a day when it is wandering along its merry way and pays little or no attention to what is occurring on the NASDAQ index. My point here is a fairly simple one and that is to make sure the indexes are moving in tandem and don't assume they are moving in tandem.

An example of negatively correlated market would include the Euro futures contract (6E) and the dollar futures contract (DX). What this means is fairly simple: when the dollar index is moving up the euro index will generally be moving in the opposite direction. I never trade the euro without having a dollar chart on the screen. This practice will save you from diving into trades that are non-correlated to other markets; in this case we are talking about the dollar/euro. Dollar up = Euro down.

The purpose of this short article is simply to introduce you to the concept of correlated markets. There are many other correlated markets that exist and I urge you to explore these correlations as you can greatly improve your trading performance by understanding which markets are related to each other.

Would you like to start earning 300% every week? So would I... yet you see this type of hype on many sites these days. I don't promise astronomical returns, but 25 years of Wall Street trading experience has helped churn out solid e-mini traders for 5 years. Come see me trade. Real trading doesn't lie. Click here for a free visit to my trading room and see for yourself.

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What Is Binary Options Trading?

What Is Binary Options Trading?

Learning About Binary Options Trading

A Binary Option is a way of investing on an asset price that has only two closing positions. A good investment can be made if the closing position is forecast accurately.

The most common option is the "High" or "Low" option. To get started an agreement of the time duration is fixed before making the prediction. The asset price will either have finished higher than or lower than the price set when trading began. The trader can expect a fixed return if, at the end, his price lies on the right side of his starting price. If predicted incorrectly the trader will lose the sum that he invested when the trade was opened.

The Appeal of Binary Options

With a detailed investigation into buying and selling stocks the ease at which one can place trades using Binary Options becomes apparent.

An investor commences trading by selecting and purchasing an amount of stock or an asset. By calculating the share price individually we can ascertain what the price of the asset is.

A trader can generate a good return by selling his asset when the price has risen from the price of the asset at the outset. Likewise, the investor will experience a loss if the asset's selling price is less than the price it was purchased for.

Comprehensive knowledge and experience of multiple eventualities is essential to invest this way. A thorough understanding of how the financial markets function is of the utmost importance. The investor would need to have studied what the asset's price movements have been in the past, how the asset is influenced by price-changing events in the market, and, how the asset's price will change looking ahead.

As yet, there is no economic system in place that can prevent a Stock Market crash from occurring and we are constantly updated in the media about how events can impact upon the market. To successfully bring all of these elements together the investor who regularly generates profitable returns knows and understands asset price changes and is backed up by trading methods and techniques that can be implemented when the situation demands it.

Having no strategy or a lack of understanding of assets and the market may leave you in your own private depression. What you have set aside for investing will soon evaporate, you won't have sufficient funds to buy presents for the kids at Christmas and your partner may run off with someone more adept at investing their money than yourself!

What is appealing in comparison, is that there is no need to buy into anything when investing with Binary Options. I outlined previously in this article that binary investments feature prices of assets and if the price of an asset will rise or fall. In this case you are trading solely on an up or down movement in the price of an asset. For this reason it is a considerably less risky investment opportunity.

In addition, it is worthy of note that Binary Options Trading helps potential investors get up and running without putting down large sums to begin, because the required investment amount can be much smaller.

Imagine, if you will, that if an investor was looking to commence trading on Gold, which based on the current value of Gold would make it very difficult for most people to make it a worthwhile asset to invest in. In Binary Options Trading no one is really buying any Gold, but instead traders are investing in price changes of Gold over a set time period.

Assets Available to Trade with Binary Options

Now we have started speaking about commodities. In the paragraph before we spoke a little about Gold. Now would be a good time to delve into the types of assets most often used for Binary Option Trading.

- Indices - An index is the market itself. Together with the NASDAQ, there is the Dow Jones in Tokyo and the FTSE in London. You may be surprised to learn that it is possible to invest on the markets themselves.

- Forex - Or Foreign in Exchange is concerned with exchange rates between major currency pairs, such as the USD, the GBP or the JP. You can trade on combinations of all these major currencies

- Commodities - A raw material or primary agricultural product that can be bought or sold, such as Gold, Copper or Coffee.

- Stocks - These are shares in a particular business or institution and could range from a Hi Tech company such as Hewlett Packard or IBM to a football team like Manchester United or a brand of shoes, such as Jimmy Choo.

Selecting which asset to trade on is the beginning point for a trader. As I said previously the beauty of Binary Options Trading is how easy it is to get up and running. However it will, nonetheless, be beneficial to research your chosen asset somewhat to look for signals as to how it will be influenced by certain circumstances that can occur in the market. For example, if you have been following the rise of the mobile app Get Taxi, then it may be of interest to you to make predictions on the value Get Taxi shares. It can be said, in conclusion, that increased knowledge of asset price values will up the likelihood of making successful trades.

For more information on the types of accounts provided by Binary Options brokers head over to Binary Bonuses.

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Support and Resistance Basics for E-Mini Trading

Support and Resistance Basics for E-Mini Trading

Support and Resistance (SAR) is generally considered one of the cornerstones of technical analysis. In my personal trading, I assign SAR levels the highest level of scrutiny because most of the really good trades I have executed originate by judging the direction of the market price at SAR levels. Of course, this all sounds great but determining these significant price levels and determining their importance, relative to other SAR lines, is truly the meat and potatoes of learning to trade e-minis. Let me ask you this; how do you know which lines are the most important and which ones can be ignored? I'll try to help with this determination throughout the course of this short article.

One of the truest statements any trader has dared to utter centers on the idea that if you draw enough lines on a chart the price action is bound to stop on a given line. The idea is to identify useful lines and avoid the spurious signals created by market noise. Market noise is the basic operation of the exchange as non-professional traders enter and exit at random intervals. Note: I highly recommend a thorough understanding of randomness and market price movement. It is a topic that is generally ignored by trading educators.

Let's get a workable definition of support and resistance: the price movement of an e-mini contract generally is likely to stop, reverse or pierce pre-determined price levels. These levels are typified by several stop and reversals at the predetermined price. I am a reactive trader in that I do not use support and resistance lines that are derived from predictive SAR tools like; Murray math lines, floor traders pivots, any sort of calculated pivot line, or levels created through Market Profile. I like my lines to form through the course of daily trading where I can determine how, when, and why these lines are formed and the reason for their formation. I have real confidence in a price level when I can actually watch the SAR form, and I have a better understanding of why it formed at a certain point.

Once you have marked up the chart with SAR, then assign a preliminary importance to each line. I give highest priority to levels where I can identify a significant increase in volume, previous closes, daily highs and lows, and overnight high and lows. You will need to identify which lines are most important for your trading style; these examples are just basic to my personal trading style.

I hope that I have shed some light on this topic for newer traders. Support and resistance should be part of any effective trading plan.

Would you like to start earning 300% every week? So would I... yet you see this type of hype on many sites these days. I don't promise astronomical returns, but 25 years of Wall Street trading experience has helped churn out solid e-mini traders for 5 years. Come see me trade. Real trading doesn't lie. Click here for a free visit to my trading room and see for yourself.

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The Market Is Always Right and You Are Always Wrong, Period

The Market Is Always Right and You Are Always Wrong, Period

I like to watch people behave in a variety of situations. I have noticed the vast majority of people (traders), but not all, have an intense desire to be "right "and are very uncomfortable with the notion that they could be wrong. Now let's flash to e-mini trading, most traders understand that any trade, successful or unsuccessful, is a function of probability. The randomness principle simply precludes the possibility that any trade is 100% successful, and that's a darn hard concept to swallow, for some people.

So if there are no 100% guaranteed trades, how in the world do e-mini traders sleep at night? Better yet, how do traders made money when there are absolutely no certainties that a trade will be successful, or that it might end up in disaster?

One of the first signs that a trader might experience trouble as a trader is his/her response to a losing trade, especially in the early going in their career. My approach to trading, after spending nearly 30 years on the institutional side of trading, is to take the highest probability trades as they arise. I take the highest probability trades knowing that some of the trades are not going produce a winning trade. However, I know that if I continue to take high probability trades at every turn that over an extended period of time I am going to profit handsomely.

It is my opinion that every successful trader is forced into the mindset I'd described in the previous paragraph. As I mentioned, traders who become overly excited about a winning trade or let loose a stream of oaths that can turn the room absolutely blue when they experience a losing trade either has to change his or her approach to trading or their emotions will quickly send them on a topsy-turvy trading ride that will always end with the trader arcing into disaster like a lawn jart. Oddly enough, when traders experiences problem they complain that the trade was a "perfect" set up and there is no reason it shouldn't work. Well, for even the best trade there are usually ample reasons it doesn't work. My point here is a simple one; no matter the set-up, the market is always right and you have to learn to accept that principle. If you don't believe me, check your futures trading account balance after a losing trade and then decide who is right. You cannot argue with numbers.

It's important to remember that the market always trades in a certain context and you have to be acutely aware that context. Secondly, even the best trades will fail and that is simply the nature of trading.

Would you like to start earning 300% every week? So would I... yet you see this type of hype on many sites these days. I don't promise astronomical returns, but 25 years of Wall Street trading experience has helped churn out solid e-mini traders for 5 years. Come see me trade. Real trading doesn't lie. Click here for a free visit to my trading room and see for yourself.

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Top 10 Binary Options Tips

Top 10 Binary Options Tips

The Binary trading industry is full of hidden opportunities. However, not all the traders are aware of all the factors which can help them climb the ladder of success. For this reason, it is extremely important to have some Binary Options tips in reserve.

Understand the industry and the trading tools

Binary Options trading is so simple that no experience or only a mere knowledge of the financial market is required to be successful - that is where traders go wrong. Traders cannot embark on this type of trading if they don't understand the concept of this industry first.

Know the industry

Binary options started its ascension in 2008 and since then, this industry never stopped producing successful traders. This type of trading differs from Forex trading in many ways. However, the most striking difference is the fact that with online trading, the traders have greater opportunities of earning large amounts of money in no time if they trade smartly. Basically, traders only have to predict if either the price of an asset will go up or will decrease within a determined period of time.

Know the trading tools

The variety of trading tools available over several trading platforms is almost the same. There will be the timeless Classic Binary Options tool, the 60 seconds tool, the Ladder tool and the Pairs tool. Recently, some brokerage firms implemented a new tool which allows traders to duplicate their winning trades. It is to be noted that the same tools can be named differently on various platforms.

Choose the right broker

Choosing a reliable broker is of utmost importance due to the innumerable amount of brokers all over the internet. The easiest way to judge the reliability of a broker is to evaluate the following elements.

1. The platform - it should be nicely set-up and user-friendly.
2. The features offered should not be confusing.
3. The registration process should not be complex.

In addition to these three elements, it is recommended to carry out research on the reputation of the broker by going through reviews. It is easy to recognise a good review, as it will provide balanced information about the broker.

Analyse the Market and be a strategist

A market analysis might seem difficult to traders who don't have a notion in global economics and financial markets. Fortunately, while speaking of online trading, it is not compulsory to have a background in finance or economics.

Analyse the market

In order to have a deeper understanding of the market, it is highly recommended to make use of market reviews found on certain brokerage platforms. These reports highlight the most important events happening in the financial market and can definitely help to make more accurate predictions.

Be a strategist

Being a strategist is not complicated if traders identify the strategy that fits them the most. A popular technique used by many traders is the Trade Journal. The concept is very simple, it consists of keeping a meticulous record of all the trades placed. By doing this, traders are enabled to keep track of the performance of the market, hence, they can better forecast the price movements of the assets they trade.

Choose the Right Asset

The choice of assets is important as it is one of the basics of trading. Generally speaking, there are 4 principal categories of assets. There are Indices, Commodities, Stocks and Currencies. Each asset evolves differently on the stock market and some are more volatile than others. For example, oil recently proved to be the most volatile commodity of 2016 as its prices drastically fluctuate every day. In this optic, it is important that traders, especially the beginners, choose their assets wisely.

Risk Management

The term Risk management can impress traders at first glance. However, it is a very simple concept that can protect the capital of traders. Accordingly, one type of Risk management, also known as money management, only consists of investing 5% of the initial investment per trades. By doing this, the traders ensure that they will never be out of capital. This is a widespread technique which is becoming increasingly popular among novice traders. Even if investing small amount means reaping less profit, it still remains the most secure way to invest money in options trading.

Customer Service

A top-notched customer service is what makes a broker stand out. Customer service is important as its duty is to guide traders throughout the whole trading journey. In order to know if a customer service is responsive and helpful, it should be tested. Before opening an account on a trading platform, it is recommended to prepare a list of questions and call the customer support department to evaluate them. This small test can spare a lot of future frustrations.

Subscribe for Trading Signals

Trading signals are useful as they provide calculated predictions of future movements of assets' market value for future trades. They basically constitute of deep analytics of the market carried out by signal providers. Hence, the traders only have to decide whether they will follow the recommendation or not. It is to be noted that this tool is not the same as trading robots since trading signals do not place trades on the behalf of traders.

Learn how to trade

Nowadays, many brokers have implemented a trading academy on their platforms in order to help traders further develop their trading skills. These educational arenas are mines of information, therefore, it is important that traders dedicate a portion of their time there. This feature aims at strengthening their knowledge of the financial market and the platform.

Avoid being emotional

Emotions are not listed in the pool of tools of trading. This is because they are considered as a brake to successful trading. A few studies highlighted that human beings react in a totally different way when they are too emotional. It is recommended to trade with a peaceful mind.

Accept Losses

Accepting losses is not digestible to everyone. However, in the binary industry there will always be two outcomes and unfortunately losing is just part of the game. If traders know how to accept the losses and adopt a good state of mind, their future trading experience will positively change and that will ensure an unhindered journey.

When opening an account on a platform, it is important to fully use all the tools that it provides. In order to be aware of the several opportunities present on a platform, it is recommended to first research reviews from different countries, like Binary Options trading in UK, U.S, Australia, Canada and more.

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