Regardless of the type of trading strategy chosen, losing trades are possible when working with binary options . No trader is immune from losses. Therefore, one of the main tasks facing market participants is to minimize losses. The “3 Moose” strategy helps achieve this goal.
Characteristics
The “3 Moose” strategy has the following features:
- trading platform - any;
- trading asset - any currency pairs;
- timeframe - unlimited;
- the best brokers are Quotex , PocketOption , Binarium , Alpari .
When choosing this strategy, you cannot use the Martingale method .
Trading Features
Even compliance with risk management rules does not always bring positive results. The reason lies in the fact that this approach is effective mainly at the testing stage of the chosen trading strategy. But in real conditions, other factors arise that reduce trading performance:
- trader behavior (inattention, impulsiveness, etc.);
- actions of the broker (providing incorrect data, failure of the trading platform, etc.);
- sharp rise or fall in prices, etc.
As practice shows, traders suffer the biggest losses due to their inability to control their own emotions. In this case , books on trading psychology do not help. Regardless of emotional state, work experience and other factors, repeated losses incurred over the course of a day or week will unbalance any trader. Hence the mistakes that seem simple at first glance.
The result of an emotional breakdown is usually multiplied losses that cannot be tracked during strategy testing. As a result, traders, for this reason, often abandon the chosen approach, becoming disillusioned with it. Moreover, this also happens in cases where the strategy is really capable of bringing good income when trading binary options.
To avoid such consequences, it is recommended to combine real trading with work on a demo account. The latter is used to accumulate losing trades.
The essence of the strategy
The essence of the “3 Moose” strategy comes down to the following: the trader begins trading, using what he believes is a profitable strategy for binary options , on a demo account. In this case, it is necessary to comply with the rules of entry and exit that are provided for by the chosen approach. Then, as soon as three losing trades in a row occur on the demo account, you can open trades on the real market.
Due to its simplicity, this strategy is suitable for almost all trading methods and strategies. 3 Moose can be used in combination with binary options indicators , strategies, and even free online binary options signals . The effectiveness of this approach is determined by the characteristics of the market. In the latter, trade symmetry is observed. That is, the market usually alternates between profitable and unprofitable transactions.
Trading Rules
Before you start trading within the “3 Moose” strategy, you must complete the following steps:
- Open a demo and real account with one reliable binary options broker .
- Reconcile quotes to avoid significant discrepancies.
- If binary options trading is carried out in MetaTrader4 , then the settings on each trading terminal need to be synchronized. If automatic trading is carried out, then you need to select the same presets of Expert Advisors or robots for binary options .
- Decide when to enter the market. If short-term contracts are traded, then this point may be the opening of the European Exchange .
After preparation, you can start trading binary options on a demo account . As soon as the number of losing trades reaches three, you need to switch to a real account. It is recommended to open the first trade in the direction of market movement in accordance with your strategy. This is explained by the fact that the principle of operation of the “3 Moose” strategy does not depend on which transactions turned out to be unprofitable. That is, if the balance on the demo account has decreased due to the fact that the trader opened transactions to buy Call options, then on the real account (in cases where the market is really moving in this direction) similar orders can also be placed.
In the future, the behavior algorithm is similar. If on a real account three transactions in a row brought a loss, then you need to return to the demo account. And then, after achieving the specified conditions, you can start trading with your money again.
Evidence of the effectiveness of the strategy
For an example that proves the effectiveness of trading using the “3 Moose” strategy, trade using free online signals on a demo and as soon as you get 3 losing trades in a row, switch to a real account and open trades there.
To confirm the effectiveness of the strategy, the most unprofitable movement of the equity line was taken. The first losing trade was chosen as the zero point. Next are three “elks”, showing that after the order was closed, the trader’s deposit decreased. After this, you can move on to trading on the real market. The summary histogram indicates that thanks to the “3 Moose” tactic, the number of losing trades has decreased. In monetary terms, this led to savings of 35% of all funds invested in trade. In addition, thanks to this tactic, the influence of emotions on the trader’s behavior is eliminated.
Psychological influence
When trading binary options, a trader, regardless of experience level, experiences a strong emotional stress. Essentially, after opening a trade, the user has no choice but to sit and wait to see whether the forecast will work or not. And the longer the expiration period, the stronger the emotional stress. As a result, after several transactions, the trader’s performance sharply decreases. His condition is improved by profitable operations, the emergence of which is facilitated by the “3 Moose” tactics.
Conclusion
This strategy will help increase profits not only when trading binary options, but also for traders trading on the Forex market . If we consider the “3 Moose” tactic within the framework of psychological stress, then this strategy for binary options significantly improves the trader’s condition. The fact is that the latter suffers losses mainly on the demo account. That is, the trader does not lose his money by opening and closing positions. In addition, this tactic reduces the likelihood of errors, which is especially important for beginners.
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See also:
How to choose a binary options broker
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