3 steps to improving your binary options trading journal

Hopefully you have a trading plan for binary options before you start trading live or even demo testing. This plan should include your money management rules, your entry and exit rules and other aspects of your trading system, a schedule, and more. One of the many useful elements to include in a trading plan is a trading checklist.

What is a checklist? The purpose of a trading checklist is to ensure that you never forget to take any essential steps while you are trading. There are a lot of things which can distract us.

Our emotions, environment, and day to day stresses can all take a toll on our concentration.

A checklist will spare you from making foolish mistakes that can cost you money. Every trading checklist will be unique, based on the requirements of your particular trading method, money management rules, schedule, and other elements of your trading plan. What they have in common is their level of detail and the fact that they cover all aspects of trading in a comprehensive fashion. Here is an example of a trading checklist for a price action binary options trader:.

Patrick the price action trader uses the following set of guidelines to make sure he never deviates from his trading plan. Is my environment clear of distractions? Have I read my trading plan today? Does it double as more than one type of price pattern?

Here, Patrick also includes specific rules, for example that he will trade inside bars as inside bars, even if they are also pin bars. What is the justification for taking this trade? Do I understand that justification, or am I just trading by rote?

Will this trade be in the direction of the trend, if there is a trend, or against the trend? What is going on at a higher time frame? What is the big picture? Where are the pivot points I can expect price to react to during the course of this trade?

What is the payout percentage on this trade?

What is the out-of-money reward? Have I correctly calculated my risk given the payout and refund percentages set by my broker? Is there a news report coming out?

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Is this a weekend trade? While in a trade: Keep an eye on these areas during the course of the trade in case early closure is required.

If the original reason for the trade no longer exists, it is time to get out of the trade. If a new pattern forms indicating that price is about to reverse, the market is choppy and I should get out.

Do not allow my perception of time to skew my judgment. Backtesting can be done with a demo account. Why did I win or lose my trade? Do I know the reasons? If not, I need to analyze my trade until I understand it. During his trades, Patrick, the price action trader, takes notes about what is taking place on his screen and what decisions he is making in response to the bars on his charts. Even before he enters a trade, he writes down what he sees, why he believes there is a justification for a trade, and how he feels about the trade.

After the trade is complete, he returns to his journal and writes down the outcome of his trade and his analysis of his win or loss.

If he cannot figure out why he lost a trade, he comes back to it later, re-reads his entry, analyzes the trade again, and writes down the reason once he does finally figure it out. So now you have some idea of what kind of details should go into a trading checklist, which is just one element of your trading plan.

You will probably come up with new additions to your plan over time as you test and trade live and discover situations which you had not previously encountered or accounted for.

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A great trading plan is an ongoing creation, one which will get better and better with time and effort, just like your trading career as a whole. Want to keep your own journal?

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Mobile Apps Mobile Trading Guide Trading Tips Beginner Tips Binary Trading is Simple Not Easy 6 Stats That You Should Know Accountability Trading Partner. How a Checklist Can Improve Your Results in Binary Options Trading Posted on May 8, by binaryadmin. Find out here What is a checklist?

Here is an example of a trading checklist for a price action binary options trader: Before looking at the charts: Before placing a trade: Use the following articles for more tips on being a successful binary options trader: This entry was posted in Trading Tips.

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