It is very important to keep track of your results when you trade with binary options. It is important if you trade using your own market insights and it is important if you are trading with binary option signals. Keep track of your results in detail. The more precis you records are the more information they can provide you with and the more value they will hold.
How to track trades?
The easiest way to track you trades are usually through tracking each trade in a spread sheet. I prefer to have one master spread sheet where I enter all trades and a number of child spread sheets where I track specific types of trades that I want to keep an eye on. This includes trades in different types of assets and trades based on signal from a specific signal provider. The more info you track the better.
Why you shouldn’t use the brokers records?
Many binary options brokers provide statistic over your trade. This statistic is usually very basic and there are large benefits in keeping your own records. There are several reasons for this.
- You can trade more info. The more info you include the better. It is very common that information that seems unimportant at first can be very valuable a few years down the lane. It is therefor best to include all information you can include in your records.
You can include information that the broker don’t have access to. This includes important information such as what information you based your trades on, if the trade was a part of a strategy you were trying out and so on.
- You can make sure that the binary broker doesn’t cheat. It is extremely unusually that a binary broker cheats and all established brokers are honest. There is however always a small risk for cheating if you trade with small lesser known brokers. If you write down the exact values for every trade then you know if they change the numbers. Remember to write down the number you see on the screen when the purchase is confirmed. Binary options are updated every second and there can be small differences between the number you see on screen and the current maturity point. Keeping your own record like this can also help you find peace when you think they cheated because you remember the numbers wrong. Carefully kept records eliminate the risks of confusion. You have all numbers written down. If you want proof you can choose to screen shot each transaction and note the file name of the screenshot in your records.
In short, tacking your trades yourself gives you more information than you ever get if you just use the records that the broker keeps for you.
Keeping track of your trades
It is important to keep details records of your own trades so that you know how well you are performing in each asset class and each individual asset. This way you can find out which classes you should focus more energy on and which you should stop trading completely. Analyzing yourself and your trading pattern is just as important as analyzing the markets in becoming a successful trader.
Keeping track of signal trades
It is very important to keep separate records for your personal trades and those trades that are based in signals sent to you by your signal provider. If you do not keep separate records you will not be able to tell how well your trades are doing nor how well the trades based on signals are doing. You will only see how well you are doing overall. This information is useless since a´part of your trading might be doing really well and another part might be doing really poorly. If this is the case then you can significantly improve your bottom line by eliminating your poor trades regardless of whether these are a part of your trades or a part of the trades from the signal provider.
You might not have the same results with a signal provider as those they advertise on their website. This can in some cases depend on the signal provider deceiving their clients. A much more common reason is however that you are unable to find binary options with exactly the same values as those provided by the signal provider. Binary options are adjusted to reflect market conditions every second. If is takes you 5 minute to act on a signal then that can cause a statistically important difference in the end result. You might experience a slightly different return on your investment or a slightly different success rate than the official figures from the provider suggest. The only way to know how big these differences really are is to keep personal records over all trades and compare your numbers to the official numbers.
Keeping track of trades based on signals from several providers
If you subscribe to several signals or are paying for extra signals from a provider then it is very important to track the results you see with each signal individually. This is the only way to know exactly how well each individual signal provider is doing. If you do not keep track of each signal individual (and extra signals individually) you might miss very important factors that affect your bottom line. An example of this is that you might be earning a lot of money but although individual signal providers provide you with signals that is actually loosing money. If you keep detailed records you can eliminate these signal feeds from your trading strategy. If you don’t you might keep paying for a part of your strategy that is actually loosing you money.
Detailed records that track each type of trade and each signal source separately is necessary for you to be able to optimize your trading.