The answer to how often you should place a binary option trade is really determined by what kind of trader you are. Some people are very picky about placing a binary option trade and will only do so when conditions are ripe for their overall strategy.
I think this kind of discipline helps new binary options traders significantly in minimizing potentially disastrous effects of overtrading.
Pick a system you’ve either tested yourself or have purchased and believe in and only place a binary option trade when your system says so.
This way you can easily determine whether the system you are using is goo in picking binary option trade entry points or not.
Trading binary options is often an exhilarating activity, filled with emotional swings, being disciplined in your approach makes it a lot easier to handle these volatile times and is a great learning tool in how to handle pressure and adversity not only in binary option trading but in life in general.
The Classic Over-Trader
This is a trap many inexperienced traders fall into when they start trading binary options. While the goal may be to exhibit patience and discipline when deciding to place a binary option trade, oftentimes our emotions and ego get in the way and we start to place binary option trades based on a gut feeling.
Some binary option traders do really well following their gut instinct at first but eventually things turn and they end up having to go back to the disciplined system they started off using.
We see theses over trading tendencies most often amongst hedgers. While careful consideration is taken before placing the initial binary option trade early in the expiration cycle, all bets are off once the underlying asset has a chance to move around.
Recall that there are times hedgers find themselves locked into a two trade position that guarantees a loss, albeit a small one. Well no one likes to lose right? So what you’ll see is traders looking to turn a small loss into some sort of gain at the risk of losing even more.
This is bad form.
A discipline trader following a disciplined system knows there is no harm in taking small losses on positions.
The goal is to live another day to place another binary option trade and this can not occur if you continue to over trade, placing risky trades to avoid small losses. Our advice, take the loss and move on to the next trade.