BinaryOptions.net: How did you get into binary options and where do you stand now?
Mifune: Hello, everyone! I write a trading blog here on binaryoptions.net under my username mifune. Although I started my binary options trading venture relatively recently (February 2011), I actually first started trading back in 1998, when I was five or six years old, over the Internet. I borrowed $500 from my dad and invested in relatively cheap stocks in higher volumes. Obviously, at that age I knew nothing about trading strategies or how to invest properly, and nobody in my family has ever led a career in anything finance related. At that age, I believed investing in cheaper stocks was a “better deal” than investing in more expensive stocks by virtue of the fact that they were less expensive. But I was always simply interested in the financial markets and every weekday I would check the business section of the newspaper to see how the Dow Jones, NASDAQ, and S&P500 had performed from the previous day, although I never really understood the concept of the stock market outside of the fact that it can make you money and that if it went up it was generally a good thing.
I eventually got out of the loop of buying and selling stocks from my account, but the account was up to just over $800 by the year 2000, and I withdrew everything at my dad’s recommendation, given that I wasn’t putting in the time to monitor how I might be doing on a regular basis. After that, I lost interest in trading/investing, and like almost all kids, I had absolutely no clear idea of what I wanted to do career-wise, and had no idea that I would eventually resume an interest in trading the financial markets later on.
I can’t precisely remember how I found out about binary options (outside of surfing the Internet, like almost everyone else), but I was particularly intrigued by the fact that it was a form of trading that did not take a lot of capital to get started and it offered the potential to compound profits to multiple times their original size. Like most traders, I started very enthusiastic about training and tried various strategies that I found around the Internet involving various indicators and combinations of many indicators that formed a “system.” In fact, sometimes with all the indicators plotted my chart looked like a piece of abstract art. (These days I basically just use a price chart only.) My win percentage was just over 50% after my first few hundred trades, but in the midst of conspicuous losing streaks I found myself trying to compensate for previous losses by doubling my trade size, triping, quadrupling, etc. Obviously it should go without saying that I eventually wiped out several real-money trading accounts and had done nothing but lose money in the first eight months of trading binary options.
Like almost all beginning traders, I was naïve and was continually searching for that one “holy grail” indicator or set of indicators that could help turn my trading around. Soon I figured out that there wasn’t one, and as I read around on various trading websites, I realized that it was up to me and me alone to find a strategy that would be compatible with my own trading “personality.”
Roughly three months into my binary options journey, I decided to scrap the search for the holy grail and focus on formulating my own strategy. I had heard a lot about the effectiveness of support and resistance as potential tools for predicting where the market would head next. The way I traded support and resistance back then is fairly similar to how I trade it now (the focus of my trade results posts), but I still lacked the necessary mental qualities required to trade successfully. My money management was also a mess, and I would still double up, triple up, etc. in order to recoup past losses. I would also trade with very little patience (the most important trait that a trader can have, in my opinion) and trade over 20 times a day in many cases. Oftentimes, if a trade went against me right away, I would immediately take a trade opposite the direction of my initial trade to try and “cancel out” the upcoming loss from the previous trade. Needless to say, this wasn’t a very effective strategy. I had a strategic blueprint to effectively trade the market, but my money management and psychology were nowhere close to where they needed to be to become a profitable trader.
Over time, I learned to think of trading as a game of probabilities and to incorporate more than just price levels into my trading, all the while fixing my money management plan and learning to remain patient and emotionally detached from the markets and the outcome of any single trade. Simply put, I learned to focus on effectively trading the markets, and totally divorcing myself from the thought of the money-making aspects of it. The truth of the matter is that we trade to make money, but it’s not something you can consciously think about while trading without expecting emotion to come into play.
My first profitable month trading binary options was in November 2011 and I have been profitable in every month that I’ve traded binary options since then. I did, however, take a break from February 2012-August 2012 due to time constraints as a university student. I began trading binaries again in late August 2012-November 2012 before trading them on a limited time basis over the the next eight months – and sometimes not at all for weeks on end, once again due to my academic demands. However, in June 2013, I resumed regular binary options trading roughly 3-4 days per week. Also, in October 2012, I began swing trading spot forex on a real live account. This is currently my primary form of trading and one that I hope to pursue as a career, perhaps independently or as part of a firm. However, I consider strike-entry binary options to be my trading roots and I enjoy coming back to trade them.
Although I have been profitable on binary options for quite a while now despite such a rocky start, I have continually gotten better over the months after finally getting over the initial learning curve and mastering the mental side of trading. My trading strategy is still fundamentally based around support and resistance levels using previous price history, pivot points, and Fibonacci retracement levels, but I also take into account price action (i.e., candlestick types and patterns), trend direction, momentum, and general market sentiment when considering trade set-ups, as well.
BinaryOptions.net: What are your goals with teaching? What can our members expect from your articles?
Mifune: The vast bulk of my blog articles detail trades that I actually took and my goal is to explain to readers the exact thought process that goes through my head on each and every individual set-up that I take and/or consider, and my precise reasons for taking or not taking the trade. I also will occasionally discuss trading psychology and the overall mental aspects of trading during the course of my posts, as well.
The overall goal of my blog is, of course, to help educate other traders and give them a view of the actual trade set-ups that I take. I sincerely hope it can help other traders understand a particular strategic way of how to successfully trade the markets and the type of mental qualities (e.g., patience, impartiality) that are required. Regardless, how one person trades the market may not work for another person for the simple fact that all of our brains are wired differently. If one trades similar to how I do, then that’s great. But finding a strategy that works for you can be almost as personal as a pair of shoes. It’s really up to the trader to find their own trading strategy and trading plan and stick with it so long as it has a track record of being successful and slanting the trading probabilities in your favor.
With that said, I can never guarantee to anyone that he or she will ever make a dime in the trading business. However, if you put in the time and effort into formulating your own strategy and trading plan, mastering your money management (something that I’ve also written about on my blog in the past), and can master the mental aspects of trading and consistently ingrain everything so that it becomes almost instinctual or second-nature to trade, then it is possible that you can potentially make it as a trader and do it profitably.
BinaryOptions.net: Any last words for our community?
Mifune: If anyone ever has questions about my articles or about absolutely anything in general, I would encourage you to respond directly to my articles or find me on the forums.