part 2 of "how I went..."
Hello traders! In my last blog post I told you how I went on to convert $200 to $2500 and blew it off in just a single day. I also asked you guys if you could figure out the mistakes that I made while trading. Go through this article to know if your got the mistakes right.
Even though I lost my money while trading, I couldn't help to get myself out of binary options trading because the charm of nearly doubling my money in just a minute was way too strong to let go. So I started to think what went wrong. I realized that I converted $200 into $2500 only because I was too lucky. Unless you have the luck on your side you can't go on to win five trades in a row without any knowledge. After doing a bit of analysis I realized that my trading strategy was the worst that can be. I kept investing all my balance every time and I was bound to lose one trade at some point. Whenever that would happen I would lose all the money at once.
It was a terrible example of trading and a very poor trading strategy. Unless I had an unrealistic luck I was destined to lose my money which ultimately did happen. After some research I came to know that I should have not traded more than 20% of my money in a single trade. My maximum trading amount should have been $40 instead of the entire $200.
I made some strategies and decided to trade again. I deposited another $200 and started to go through the USD price level. I observed that all the USD vs other currencies graphs were going up while all the other currencies vs USD graph were going down. This clearly meant that USD was getting strong. I opened USD vs EUR asset and waited for it to reach a local minimum. As soon as the graph started to rise again I traded Up option with an investment mount of USD 40 which was precisely 20% of my total stake. Unfortunately I lost that trade but I knew I was trading with the right strategy.
I waited for another similar opportunity and again traded 20% of my remaining balance. Since my remaining balance was USD 160, I traded USD 32 this time. I got it right in my second attempt and I made a profit of 80% i.e. USD 25.6. I gained a lot of confidence after winning the second trade and started to trade in the same manner till the bear run of USD ended. After a few hours of hard work I checked my balance and it read USD 270. I had earned USD 70. I know that this amount is not very big but when you consider the fact that the total investment amount was just USD 200, the net profit was 35% in just one day. Not bad, huh?
That is what a good risk management and trading strategy can do for you. It can help minimize your loss while making sure that you keep making a good profit. Let me know in the comment section what your trading strategy is? Is it similar to this? Do you think this is an ideal risk management plan? I would love to know your views.