Binary Options trading psychology explained

You might be familiar with binary options trading. It’s a way of investing in binary options and other kinds of assets by speculating their prices. Since this trading is easy to execute, many traders have tried their luck in the binary options world. 

But before you start trading binaries, here’s a quick for you- do you know what binary options trading psychology is or how it works? 

Binary options trading psychology is a dominant feeling that reflects your mindset. With a strong mindset, you can make better decisions, and your chances of losing money also get reduced. 

However, with a negative mindset, you won’t be able to understand the trading challenges. And without proper knowledge, you only trade to lose. Revenge trading is a prime example of a negative mindset. 

What is revenge trading, you may ask? It’s a situation when a trader invests more money in the market to compensate for the previous losses. But what really happens is they lose the trade because they are too busy investing money rather than analyzing the chart

Market Psychology in Trading 

When it comes to trading, there is a simple success rule that everyone must follow. It’s that trading and emotions don’t go together. When a trader gets emotional, they don’t take a risk, which decreases their chances of succeeding. 

Emotions a trader feels with respect to trading are influenced by time and market situation. If the timing is right and the market is doing well, traders get overwhelmed by emotions. Thus, they trade an asset without doing a detailed analysis. 

This, in return, results in a loss as traders invest their money by getting excited and not by examining the market or reading the charts. 

Traders can make huge profitability with binary options trading by keeping their emotions in control. If you don’t want to become “that” trader who has lost everything in binary options trading, you should play your cards right. You can do this by practicing in demo accounts and understanding the past market history of a given asset. 

Skills That Can Make You a Successful Trader 

To triumph over your worst enemy, i.e., your emotions, you need to develop specific trading skills that can make you an expert. These skills will not let emotions ruin your trading moves. 


To become a successful binary options trader, you must be disciplined. But how will you do that? Simply by thinking about your end goal instead of money. 

Indeed, trading is all about money. After all, people trade to win a huge amount of money. But for making money, you need to stop thinking about it and start focusing on things that can help you make money. 

In simple words, you must concentrate on developing strategies, generating trading tips, and analyzing the market. Additionally, you should have correct reasoning and statics for each of your trades.

If your calculations or reasoning even have a minor mistake, you might end up losing all your investment sooner.

Imagine Someone is Watching

When you imagine that someone is watching your trade and judging your moves, you are more focused and less distracted. This trick is helpful and works for both new and experienced traders. Moreover, it is simple to apply. 

When you think that someone keeps an eye on you while you are trading, you become more alert. And this thing takes you one step closer to your trading goals. 

Along with this, you can also do a quick research on successful traders to learn some of their personality traits and trading styles. 

Make a List 

We all get confused, and it’s normal. But what is not common is letting the confusion control how you think. To have clarity while trading, you can make a list of essential things. For instance, you can write about the assets you trade and when you have traded them. 

Making a list is an easy way of defining your goals. Moreover, a trading list can also keep you focused on days when you are unsure about trading. And in the end, you will become an expert trader.  

Stay Calm

Even professional traders can lose a lot of money if they are not calm. That’s because when they are impatient, they make impulsive decisions, which don’t work in their favor. 

To keep yourself calm while trading, remember three simple things, i.e., investing in the right asset at the right time, have patience till the result is displayed, and trade in small amounts.

One Day Rule

Changing your behavior in one day might not be easy, but you can do a better thing to bring changes. You can follow the one-day rule. 

This rule says you must train your brain into thinking that you are staying calm or disciplined only for a day, but every day. With this simple trick, you can bring some healthy changes to your trading behavior. 


No matter how disciplined or calm you are, you might feel demotivated someday. And those are the days when you should trust yourself and your trading strategies. 

You can learn new trading tricks, use better indicators and charts, and do a good market analysis to increase your knowledge. That’s because when you have enough knowledge, you are confident about your trading. When you are optimistic, you don’t feel demotivated. 

Skills You Must Avoid 

While some skills can improve your trading game, some can take it down. That’s why it is important to avoid these skills. 


Fear is a common feeling that you might sense when trading money. But you must learn how to control fear because it can prevent you from taking risks. Moreover, it can also make you doubt one of your good strategies. 

When you trade binary options with a feeling of fear, you miss great opportunities. If this happens often, fear can destroy your trading. 

So, whenever you are afraid of trading or taking risks, analyze the market and charts. If things feel right, don’t hesitate to invest your money. 


With fear comes frustration. And when you are frustrated, you are not in the right mind to make strong trading decisions. This makes you lose good trading opportunities. 

Again, when you lose, you get more frustrated. So, you trade even hard to make up for all the previous losses. However, you lose again because you made trade by getting overwhelmed by frustration and not with a solid trading plan. 


Greed is one such thing that can take down your trading game in no time. That’s because when you become greedy, you don’t know when to stop. So you start frequently trading in an attempt to make more money. 

Greed can also result in overtrading, which again is not a smart way of trading. That means when greed is the driving factor behind your trading, you lose money more than ever. 

Pick Your Trading Style 

Along with developing good trading skills, it’s also essential to find a trading style that suits your needs and trading personality. For picking a perfect trading style, you need to understand your trading psychology. 

Here are some quick questions you can ask yourself to find which trading style suits your personality. 

  • Do you get impatient during a trade? Or do you keep yourself calm?
  • Do you like using multiple signals while planning your next trading move? Or do you feel overwhelmed with the signals and indicators? 
  • Can you easily spot patterns? 
  • Do you have a good knowledge of financial news? 
  • What time do you prefer trading?

Once you start trading binary options, you can find answers to all these questions. And then, you can pick a trading style that suits your personality. 

For instance, if you like to make quick trading moves, you can pick 60 seconds trading strategy. 

Why Is Trading Plan Important?

Having a detailed trading plan can keep your emotions in check. That’s because you make a trade depending on the market information and not by getting overwhelmed by your feelings. 

A well-structured trading plan also reduces risk, helps you do detailed market analysis, and identifies a suitable trading timeframe. Furthermore, it also allows you to set a good expiry time and trading goals. 

Recognize The Factor You Can and Can’t Control 

Trading binary options is a mind game that only people with the strongest minds can win. But anyone can train their brain to become a master trader. 

To keep a positive mindset, you need to recognize what you can and can’t control. For instance, you can control how successful your trading strategy can be. You can also control sticking to the plan, and you can control your fear. 

However, you cannot control whether or not the trade expires In The Money. Additionally, you can’t control the fluctuating asset price. 


Binary options trading is fun, and it can be profitable. But for this to happen, you need to develop essential trading skills. Additionally, you should master your mind so that you can make the right trading decisions. 

Moreover, you should understand that when it comes to binary options trading, there is no shortcut. And if you find any, it will make you lose money. 

About the author

I am an experienced Binary Options trader for more than 10 years. Mainly, I trade 60 second-trades at a very high hit rate.

Write a comment

What to read next