Preparing for trading takes many forms. This is a serious look at some steps you should take while getting ready for a week of binary options trading.
Get Ready To Trade Binary Options
There are many articles I could write under this title. They could range in topic from why you should trade binary to choosing the right broker, making your first deposit, verifying your account and many many more. The truth is, all of those things are right. They are important steps you must take in order to begin trading with confidence and success. That being said lets get down to the nitty gritty and assume you have already done these things and are now ready to actually trade. What are the steps you will take? How will you define your approach for the week and what are the catalysts you will target. To begin with you need to start fresh, it’s the beginning of the week so hopefully you have had a good weekend with lots of rest. If you had a really good (ie wild) weekend lets just hope you remembered to get to bed early enough on Sunday to be ready for the market on Monday. You have to think like a predator, getting ready, being ready, and then being patient while you wait for your prey, the trade, to walk before you. Then, when the time is right, you can pounce on it!
The First Step In Preparing To Trade
The first step to any trade, and one I make each day, regardless of whether it is the start of the week or not, is to check the news. You never know what may have happened during the night when you were asleep. The world turns constantly, there is always a market open somewhere and/or some business, country or person who could have affected it. I look at news on two levels. First, I take the news in general. What are the general conditions. Is the world happy, sad, growing, slowing, expecting, disappointed or afraid. These things all play into how the market reacts and what it may do later. After that I will drill down into more specific news. I cover oil, gold, the US indices and some currencies so I look for news in all four categories. Oil and gold news can be easily gotten through a news service, usually free, that will gather and summarize relevant stories. News affecting US indices includes economic data, the FOMC, earnings and expectations. Also easy to get on any of a number of news websites including CNBC and Bloomberg. Currency news is a little trickier because you have to consider news from two sources, one for each currency, and then balance the two against each other.
The Second Step In Preparing To Trade
The second step to any trade I make, and the number two step in getting ready for a week of trading, is to check the technicals. I generally have a pretty good idea of what the charts show but it is always good to go back and make a fresh start, and anyway, things you learn when checking the news could influence your analysis. I always start with the long term charts of weekly prices. These show price action for one week with one bar, and show the long term fundamental trends, supports and resistances. I mark these when needed and make judgments about longer term price action relative to them. I then move down to shorter term charts of daily prices. These charts give me clearer indication of what to expect in the current week. Think of the long term chart like the tide, and the short term chart like the wave. Sometimes these charts line up and I make a trade based on them alone but usually stick to taking signals for day trades on the hourly charts or below. Finally, I move down to the hourly or half hourly charts to look for possible trades, using the tide and the wave to guide me.
The Final Step In Preparing To Trade
The final step in my preparation is to look at the week ahead and identify possible catalysts or sources or resistance. These could be political events, economic data, central bank meetings and earnings. You can easily find this data on economic calendars, earnings calendars and the Traders Almanac. There are usually hundreds of events each week, sometimes thousands, but you can usually narrow things down to a handful or so. I try to pick the ones most likely to produce market movement and then mark them on my charts. This way I will know when price action is approaching an important juncture and can use them as part of my technical analysis.
The Final, Final Step
At this point preparation is complete. I have a grip on news, I have a fresh take on the technicals and have projected potential turning points onto my charts. The final final step is to assimilate all this together, with your strategy, and wait. Wait for the market to move, wait for events to happen, wait for signals and wait to make your trade. All this preparation is akin to a hunter stalking its prey. You get as ready as you can and then you wait, wait to pounce on some profits!