The ‘Marida’ Type of Traders

Many Binary Options Traders think that they can become rich in a couple of days, this kind of traders are what is called in my country “The Marida” traders. Actually, Marida is a tiny kind of fish that feeds a lot of undersea predators. Either you are trading Binary Options or any other kind of financial instrument (Shares, Forex or CFDs) never join the Merida team.

A Winning Strategy
 
True Vs False Instinct
 
A true trading instinct derives only from experience. If you are a beginner and you feel like having an instinct you are just wrong. It is just a game of your brain, it makes you feel have something just because it needs to boost your confidence or because it is just bored and needs some adrenaline to flow into your veins. Confidence will not make you rich in the future, neither adrenaline, what can make your rich in the future is knowledge, experience, and strategy.
Avoid false instincts and try to concentrate into facts and figures while doing your math. If you are a beginner, use a demo account, and by this way, buy some trading experience for free.
In order to define a winning strategy, we must first understand what I call as the ‘Trading Triangle’. The ‘Marida team’, mentioned before, has usually no strategy and ignores completely the following triangle.
 
Shape: The Trading Triangle
What characterizes the above Trading Triangle is velocity. Each time you push one side (Performance, Risk or Time Frame) the other two sides are widening. So, if you want to achieve high profits (Performance) in short periods then your trading risk is expected to climb. From the other hand, if you seek to reduce your portfolio risk then your expected return should be lower and your time frame should get wider.

Based on this simple model is very easy to understand why you need to widen your time frames to trade any market. A wide trading time frame maximizes your profit potential while it minimizes your overall trading risk. Proof comes from statistics, 99% of all day traders are loosing their total capital after some time. Simply because when you are trading on a daily basis, your trading cost (commissions etc) is getting very wide and that means your profit potential is minimized. It is better not to become a day-trader. Take long-term positions and make clear decisions, always avoid time pressure.


Strategy -The Trading Triangle
George M. Protonotarios
ForexExperts.net

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