How To Set Your Binary Options Risk Management -

How To Set Your Binary Options Risk Management

Although binary options trading is nothing like gambling, but not having a binary options risk management plan can result in the trader losing all his money in a small amount of time. There are different techniques to control the risk involved, so every person can set their own binary options risk management strategy:

  • Choose your bankroll– this is an important technique, because the money you do not have; you cannot spend. Think about how much money you can easily invest, and you would have to keep the pessimistic point of view here, and think how much are you capable of losing. If you have more in your bankroll than you are willing to lose, then you should take the money out. If you keep it there, then you might end up losing it.
  • Pick your trading percentage– before you start trading in on a platform, you should choose the a specific percentage, which will represent the maximum amount that you should be willing to invest in one trade. In many cases, people use the 5 percent rule, but it can be more and less as well. Although this might mean less return, but it will protect you from a very high loss.
  • Test before trade– this is a risk management strategy when you actually trade. Every trader needs to research well before designing a strategy, but there is still that the strategy will prove ineffective. That is why before making a major investment on its basis, you should start with a small amount; invest it in the asset you wanted to make a major trade in and if you think that the designated result was achieved from the trade, you should make a major investment by using it.
  • 3 loss principle– this is a prevention technique to manage high consistent losses. The three loss principle is simple; if you have incurred three consecutive losses, then it is better you stop trading at that time. You can try again the following day. Other than three losses, you should have a limit of losses that you are willing to sustain in the day, may they be consecutive or not, and should stop after that.
  • Set a maximum trade number– whether you get profit or loss, you need to set a fixed number of trades per day or month; or according to how often you trade. Once you have traded that much time, you should stop no matter the number of high payouts you have had in that time.

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