Lost over £500 on the Binary markets
Today I was have a quiet and thought I’d play around with the binary markets. They have 5 minute binaries which can even make the most boring quiet market days really exciting. With binaries, the market goes from 0 to 100 and in 5 minutes, it’s can traverse from one extreme to the other.
However, any short term market.. and especially a very short timeframe such as 5 minutes, you’re practically dealing with ‘noise’ and therefore, randomness. There’s no skill in this, it’s just gambling!
So earlier today, purely out of boredom, I thought I’d try a few trades out. Minimise risk was at the top of my head so I’m only going to go in at £1 a point. I ended up making £30 in the 5 minutes.. wow, that was easy I thought! I thought I’d try it again in the next 5 minute session and this time, I wasn’t so lucky and ended with a £40 loss…Now the need to make up that £10 loss, I thought I’d play one more time but unfortunately, when the binaries are moving so quickly jumping up and down 10 – 20 points every refresh, I didn’t see that I actually punched in £13 a point rather than the £1 I was playing with! CRAPS!
The spreads are higher than normal on binaries so I was sitting immediately on a £30 or so loss. And then it started going the wrong way… oh my, not good. £50 loss, then £70, then £160 and it kept on going. Usually, you get huge bounces between the ranges.. I was looking to get out if I could get it back to a net zero position. However, the market was only going one way and not the way I wanted. £300 loss, then £450 and then £501 and there it remained! I stared at it for a few seconds… it reminded me of the early days when I made these mistakes a lot as I couldn’t control myself and got drawn into the gamblers fallacy. Stupid stupid stupid!
However, what has changed is how long I hold onto the sense of grief. If this was the early days, I would probably be thinking about this trade for 3 to 4 days and be in a foul mood for most of it. Today, I’m peeved with myself but I’m ok with it, there’s no residue of bad feeling that’s going to linger.. I know I’ll make this back in a couple of trading sessions and it’s just a reminder to myself to always have a clear mind before any trade, never to rush into any trade (check you’re trading the right instrument and the right amount and then double check). Trading successfully should be rather unemotional.
Anyway, I hope this helps you in your trading… even the most seasoned traders make mistakes and it’s ok. Make sure you learn from each lesson. On a positive note, the loss provided me material to write for the blog and hopefully some lessons learnt for you the reader to help you in your own trading journey.
For me, I’m going to be keeping away from the 5 minute binaries.. great fun, lots of excitement but not good for the overall bank balance!
