part0013

So we've got the indicators all sussed out. We know how to identify a good trading opportunity.

Maybe the balance on your demo account is now ten times what it was when you started and you're feeling ready to 'play for real money' .

Great attitude, I love the enthusiasm but you’re not ready yet.

Now I know I sound paranoid constantly telling you not to skip anything but seriously, without this chapter, you don’t know my strategy yet.

In this chapter, I’ll explain how I open positions at different values depending on whether or not I’d profited from my previous trade.

This strategy wins back any money I lose and, the way I use it, allows me to lose 5 times in a row and still make profit!

Hopefully I have your attention now! I’ve just shown you how you can lose money winning one in two trades but now I’m going to show you how you can make profit wining just one in six trades.

Remember though, you’ll be going into the big bad world soon. When you do, you can’t just click a button and reset your balance.

You need to be prepared to lose trades and, in turn, lose money. Yes, you will lose money, even if you follow my strategy.

You need to learn how to win more than you lose. You need a game plan to get back any money lost through OTM trades (Out-Of-The-Money). You need to protect the balance of your account.

I said I wouldn't bang on about how the market is a force of nature … well I won't but yo u need to understand that it's not always going to do what you want it to.

If it did then everyone would be rich. You wouldn't need this book.

No, the market will do what the market will do. We are looking for indications that the price of an asset will go up or down, we're not looking into the future. There’s no crystal balls.

So what do we do when we lose?

So as I said, I have this money management strategy that allows me to lose 5 trades in a row. If I win the 6th time, I have made a profit over those 6 trades .

I strongly recommend that you start off with no less than £250/$250/€250 in your account depending on the minimum position amount your broker lets you open. You need to have the headroom to lose money and still keep enough to grow it back.

Let's say I've got £250 in my account on my trading platform. The asset I'm trading has a pay-out of 80% at this present moment in time. The minimum position in my trading platform is £1.

So I'm choosing to start with my first position at £1 and if I lose I'll keep increasing the amount I trade so that if I win, I'll get back the money I lost.

In this case I'm choosing a multiplier or coefficient of 2.4. So if I lose my first trade, I'll put my second on for £2.40, if I lose that, the third will be £5.76 and so on .

With this method, if I lose 5 trades, by my 6th I'll have accumulated £135.79 worth of positions, which is under my £250 account balance ( very important ).

If I win the 6th trade of £79.63 at 80% return, I'll get £143.33 return, making a net profit of £7.54.

Then I'll just start again at £1 and keep repeating the process.

If your minimum allowed trade with your broker is £10, I recommend the absolute lowest amount you should have in your account before using this strategy is £1,700.

If that applies to you I also recommend the minimum pay-out percentage should be 66% and the maximum multiplier or coefficient should be 2.5.

If you’re not sure and you need to use the money management tool I created, contact JH Options.

This is a super conservative way to trade. If you're already being as conservative as I am when it comes to placing your trades, you won't often lose as much as 5 times in a row. If you did though, you know you’re safe.

With the method of using the indicators I explained before and this money management strategy, this is the closest I've ever come to the imaginary 'guaranteed profit' I always see promised online .

Although nothing is guaranteed and this is no exception, you can consistently make profit this way. That doesn’t mean you will but I do so I know for a fact you can.

It's not 'fool-proof' but the odds are on your side. My win-rate is about 70%, which is higher than it needs to be with the safety net of the money management tool so my risk is pretty low.

You just have to make sure you're not greedy. Don't get overexcited and put half your money on one trade. If you put £1 on the first trade and you win, put £1 on the next one. Keep it at your lowest amount until you lose, then increase it by your multiplier.

This is a slow and steady way to make a profit but it doesn't necessarily mean you'll only be making small profits .

Let's say I've got £5,000 in my account and I'm trading an asset with a pay-out of 86%. I've chosen to have my lowest position at £50 and my multiplier at 2.2.

If I win my first position, I get £93 back, making a net profit of £43. If I lose the first trade but win the second with a position of £110, I get £204.60 and make £44.60 net profit.

If I lost five trades in a row, which is very unlikely if I'm being disciplined in my trading, I'd end up placing a trade of £2,576.82, getting £4,792.88 back if I won and making a net profit of £110.38 over the course of those six trades.

This can be scary. If you’re having a really bad day of trading, you could lose that £2,576.82. That’s a lot of money to lose. So never put in more than you can afford to lose in the first place .

Withdraw your profits too. My friend always saw his profit as free money and would place silly trades not caring if he lost it.

I kept withdrawing my profits until I had recouped all the money I’d lost when starting out.

Now I withdraw a certain amount each month and just keep a ‘critical mass’ in my account which I don’t even consider as money because I never intend to withdraw it.

I look at that money as a tool to make more money. It’s an investment. It’s more use to me in my trading account than it is in my bank.

If the market is good you could win 30 times in a day and make an average of £45 net profit on each trade (and I am counting losses) .

Then you'd have made £1,350 that day. If you only did that once a week, you'd be making £70,200 a year.

Not too shabby for sitting in front of your computer clicking buttons. Of course, not every day is a good day though.

When you get to that stage your mind-set will change. All of a sudden losses don't seem so bad.

I'm not gambling (unlike my friend who enjoyed a nice cold beverage whilst trading), I'm making informed choices that can either lead to profit or loss. It's like running any business.

Businesspeople make informed decisions and they either pay off or they don’t. They have to know how to recover from an unprofitable decision and make the best of the situation .

Loss is also relative. If I only needed £40k a year to live and maintain my lifestyle, I could deal with losing £20k out of £70k if that was the average profit I was making each year.

I'd still have £50k left after that loss, so I'd still have a spare £10k that I didn't really need. That’s not such a bad position to be in is it?

So practice everything you’ve picked up so far with a demo account and see if it works. If it doesn’t, go back a few chapters and read again to make sure you’ve got it right.

Once it’s going well, read the next chapter and I’ll give you some advice outside binary options which is just as important as what I’ve told you about binary options .

This book is going to really cross the dividing line between finance strategy and self-help but I don’t see that as an issue. Maybe it will end up in several different sections in the bookstore … self-help … finance … business … autobiography and so on.

That would be great. Seriously though this book is called CALL or PUT – How I profit from Binary Options, not just How to Trade Binary Options. You’ve done the bulk of it but there’s more to come so keep reading.