Last week, there was a headline about the crash of a Tesla automobile during which the driver had the car in it’s “autopilot” mode. Tragically, the driver lost his life, so it may seem insensitive to tie this into trading, but there is an important parallel. Telsa does not claim it’s “autopilot” mode is a fully autonomous self-driving car, without risk. It does not claim to be infallible. In other words, there are risks you may not fully understand, if you take driving out of your own hands.
Often times, new traders want trade signals. An easy fix, like an automated system they can just turn on and let run. They want to take their hands off the wheel and if something goes wrong, it’s someone else’s fault. They want guaranteed returns (which DOES NOT exist) and they don’t want to take the time to understand the math behind the system or signals in order to understand where, and in what market conditions, the risks lie.
This is one of the reasons we like Nadex Binary options and spreads for newer and novice traders. With the limited risk profile, a trader can place a trade with whatever system they want and their risk is limited to the “Max Loss” listed at the bottom of the electronic order ticket. You still have to manage the AMOUNT YOU PLACE AT RISK, but there is a floor to that risk. Nadex is the perfect training ground to learn and improve, and once you are comfortable with your method, you can continue to trade in regulated and limited risk environment. It’s the best way to go.