Testing Binary Options Strategies – How To Test Your Strategy
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Testing Binary Options Strategies. Before you invest big in your strategy, you have to test it. This article explains how to test your binary options strategy, and how to find the resources that help you make more money. In detail, you will learn: Why Testing Strategies Is Vital How Do I Test My Trading Strategy? Which Tools Can Help Test Strategies? With the answers to these questions, you will immediately be able to test your strategy and find the areas in which you need to improve.
Why Testing Strategies Is Vital. You need to test your binary options strategy for two reasons: You need a winning strategy, or binary options strategy you will end up broke, and Knowing whether or binary options broker not you have a winning strategy is difficult because it is a complex decision. Only a thorough test will help you understand whether or not you have a strategy that can make you money, and, binary options strategy if not, where you need to improve. Without a test, these questions are impossible to answer. There are a million of variables, and to find out which of them you have to improve to make more money is like looking for a needle in a haystack.
A good test can simplify things for you and help you understand binary options strategy where you need to improve. Trading Long Term. Even if you lose only 1 percent of your account balance over 100 trades, you would eventually end up broke if you trade this strategy. A test will clearly point out this dilemma. Without a test, you will lack the clear indication and might think that your strategy is about right. It would take you longer to make the necessary changes, or you might never make them.
Either way, it would cost you a lot of money. Testing your binary options strategy is your first step to becoming a successful trader. It can save you from unnecessary losses and make you more money – there is no good reason to forgo testing. How Do I Test My Trading Strategy? The most important value of your binary options strategy is the winning expectancy. Testing your binary options strategy means determining your winning expectancy and, if necessary, improving it to a point where your strategy makes you money.
Your winning expectancy is the product of your winning percentage and average total return per winning trade. That might sound complicated but is really easy. Assume that a strategy wins you 65 percent of your trades. You get an average payout of 70 percent, which means that you get an average total return of 170 percent on every winning trade – you get your investment back (100 percent) plus your payout (70 percent) which nets you a total return of 170 percent.
To calculate your winning expectancy, binary options broker all you have to do is calculate 170 percent of 60 percent. The result is 112 percent. Testing Strategy Calculations. Now you know if your strategy is good enough: If your winning expectancy is over 100 percent, you can expect to make money.
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