One thing I have noticed in chatrooms online is that the average binary options trader has a hard time determining subjective and objective data. A simple way to overcome not knowing the “how when why how much” or any other variable in trading is to understand the MEAN and your own MEAN or else it could be very MEAN to you if you know what I MEAN :)
To give you the definition of a MEAN might hurt your brain as it did mine when I first took statistics in school. So I will save you the headache and tell you what we want is to find is your TRUE AVERAGE based on a set of variables that you yourself will define. Remember when I said people have a hard time determining SUBJECTIVE and OBJECTIVE data. Why is this? Well most people conflict their desired results “What they want/think” with actual results “What they really get” Example look at me I made 20 winning trades trades turned $50 into $20,000!!! While their actual % return was somewhat less then that or even really ended up blowing the $50. Which is a good example of subjective “Shows the winners and forgets about the losers.” Which is a natural human tendency. But in statistics with actual objective results you can’t forget your loses or data you don’t happen to like so you better learn to live with it. You really have no choice, its REAL, so learn to keep it REAL! Now how do you change your thinking from subjective to objective? Well you do it with a MEAN – How many trades do you do a day? What % of trades do you win? How long is the average time you are in a trade? What % of your account do you risk on a trade? What am I doing right now, I am constructing data to find a MEAN.
In simple terms I want to know the actual product you produce. I can chop it up in to subsets I can combine it in a total, in math you can do all kinds of wonderful things! But you must first think in terms of EMPIRICAL DATA which will be objective data – IE REAL DATA, because remember we are keeping it real. If you make 4 trades a day and win 68 of 100 trades over a month then your REAL win % is 68% its not 100% because you told charlie about the week you had 17 trades win in a row but did not tell him about last week where you lose 10 in a row. Now you can harm yourself by becoming subjective because you are no longer paying attention to what is really happening and that can occur in your actual trades or with % of capital used on a trade because you have no limits with subjective data you could over trade or over leverage or take trades that do not fit within your typical setup all because you are not trading with in a set of predefined parameters and playing it fast and loose where you are likely going to go TILT like a poker player would.
When I am having a bad day where my trades are not working out I do not think SUBJECTIVELY/EMOTIONALLY and take more trades or bet more in order to make up the loses. I think of stopping or reducing my trade size as well of setting a fixed limit. The reverse is true for when I am winning I will trade with more leverage taking more trades all based on Objective Data. If you do not pay attention on average of what you produce on average you will be below average. So take a good hard look at your self and think how you make a trade when you make a trade why you make a trade what you get from that trade and what is the average of each of those and what averages do they have in common. You might just find something you did not know you knew and now you do which means you will :) If you are confused at all good you should be but trust me later on your brain will get it and when it does, so will you ;)