Binary Options Risk Management Trader -

Binary Options Risk Management Trader

With so many trading platforms appearing during the later years, it is no wonder that the number of investors has also grown. However, it is important for the investors to have the required education and discipline. Otherwise, trading binary options is just like playing poker.

Binary Options Risk Management

Usually, trading binary options is a profitable activity, as long as the investors understand the risks. There are several types of investors, each type having its own trading strategy and principles.

1. Preventive Traders

Those are the traders that have a solid binary options risk management strategy established. Those traders are not looking for fast profits, opening positions only for long periods. This type of strategy prevents major losses, but it is not so rewarding on short periods. Even the investors that like to risk must have some long term but safe positions opened, to recover the potential loses brought by the risky positions from the portfolio.

2. Balanced Traders

The majority of traders are in this category, as it is a balanced method of trading that combines low and high binary options risks. This trading method allows the best binary options risk management. A portfolio of this kind is composed of the next options:

  • Long term positions – Those are made with the purpose of safety. Usually, we are talking about positions opened on solid companies that can only grow in value as time passes. Those positions would bring smaller profits, but they are safe, meaning that there are only limited possibilities to lose money on those positions.
  • Medium term positions – Those binary options are open on two or three weeks, on companies that are about to announce profits or acquisitions. As the investors never know the exact date when those announcements would be made, they need to open those positions. Once the companies announce their financial results, the positions would start to bring money, and they can be closed after a few days.
  • Short term positions – Those are the transactions with a high degree of binary options risks. Usually, they are made on a short term, based on the rumors of the market. If a company announces the release of a new product on the market, it is likely for the stocks of the respective company to grow in value. The speculators would open short term positions, hoping for the rumor to be confirmed, as in this case, they would gain serious profits. this is a risky initiative, as in case the rumor is not confirmed, the investor would lose serious money on the respective positions

3. High-risk traders

Those traders are willing to take a lot of risks, and a serious Trading  risk management strategy has to be established. Those traders are willing to take high risks hoping for high profits, and sometimes this strategy works.

Every investor has to come up with a smart strategy of this kind, hoping for profits. it is a good idea to try them all, to see which one works for you, and then to settle on one of those profiles.

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