spreadsheetSo far in our article series, we’ve introduced you to the basics of how to backtest and also which statistics to use in your testing. But quantitative analysis is only one part of the analysis you need to perform to prepare a successful binary options system. The numbers will tell you how well you are doing, but they will not necessarily shed light on how to improve. It is qualitative analysis that will help you to improve your statistical results.

Set Up a Spreadsheet

A spreadsheet will help you to track and calculate quantitative data, but also provide you with input fields for qualitative analysis and notes. For every single trade you place, I recommend you write down the following information:

• Type of trade (High or Low, One Touch, Boundary, or so on).
• Date and time.
• Reason for entering the trade.
• Price at entry.
• Price at expected exit (more on this later).
• Net profit or loss (remember to calculate the proper reward percentage).

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90% $10 $1
 
200% $50 $10
 
85% $200 $20
 
85% $100 $5
 
85% $10 $1
 
95% $250 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
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95% $250 $1
 
80% $10 $0.10
 
160% - 180% $50 $2
 
95% $250 $1
 
90% $250 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
90% $50 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $200 $20
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
200% $50 $10
 
85% $50 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
85% $10 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
80% $250 $25
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
90% $50 $1
 
85% $100 $5
 
85% $10 $1
 
85% $50 $1
 
85% $200 $20
 
95% $250 $1
 
80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  95% $250 $1
 
  85% $200 $20
 
  85% $10 $1
 
  85% $100 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  90% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $100 $5
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  200% $50 $10
 
  85% $250 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $100 $5
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
85% $10 $1
 
80% - 90% $250 $5
 
85% $50 $1
 

 

Now let’s look at these one a time.

1.Type of Trade

This is fairly simple. If you are doing a High/Low trade, remember to say whether you bought or sold. Same thing with One Touch.

2. Date and Time

This should be the date and time you would have entered into the trade based on your rationale.

3.Reason

Your notes in this section will probably comprise the heart of your qualitative analysis. For every trade, you are going to want to state how the set-up met your entry criteria. This is not too challenging if you have a system with only one possible type of set-up. If however you have multiple types of set-ups (maybe you use multiple price action patterns for example), you will want to notate exactly what type of set-up you were using for each trade. You also should consider putting down information about the contexts for your trades.

4. Price at Entry

This should be self explanatory. This is the price of the financial instrument at the time that you sent your order in to the broker.

5.Price at Expected Exit

For binary options trading, this is a little problematic. If you were trading in a more traditional manner, you would put the exact price at which you would have made your exit down. But you do not necessarily have any way to know that when you do binary options trading, because brokers often pick expiry times for you.

http://www.binaryoptionsblacklist.com/tips/choosing-expiration-times-for-your-binary-trades/ will help you pick your own expiry times.

I suggest that you choose a binary options broker which will allow you to control your exit. There are a couple of different ways you can theoretically do this. One is using “Option Builder,” which is a feature included on some, but not all, binary options websites. Option Builder lets you set specific terms for your trade, including the expiry time. Another tool for controlling trade exits is early close. This feature lets you get out of a trade early if it is turning against you or you expect it to before the expiry time. You also might look for a broker which allows you to rollover your trades. This can enable you to extend the time you’re in a good trade so you can ride out your wins.

Plan this out in advance, and then test accordingly. If you do not choose a broker which gives you at least some of these tools, you will really be making things more difficult for yourself. The more control you have, the less you have to rely on luck. This is how you tip the balance of luck toward profit.

6. Net Profit or Loss

For each trade, record how much money you would have gained or lost in real life, according to the rest of the information. Use multipliers based on the win percentages and out of money rewards offered by the broker you plan to use.

Once you have all this information down, you can analyze specifics which can help you make improvements. You might notice after some testing that some trade types are more successful to you than others. Or you might discover that exiting early is helpful in conserving your bankroll, even if it makes profit gradual. You also might find out that some entry signals are more reliable than others, or are more reliable in particular contexts.

Using this information provided by qualitative analysis, you can then re-test and make changes which can improve your statistical results. This type of analysis works equally well when you are demo testing as it does while you are backtesting. Imagine how much money this can save you if you make these discoveries while you are testing instead of while trading with real money! Try a demo account today.