As in every type of trade, the success of the binary options trading process depends on the effectiveness of the measures taken to manage personal funds. In other words: from the right costs planning, analysis and taking into account possible risks, to the possibility in cold blood, without getting excited, to determine the most appropriate time of sale or purchase of the assets.
Even the most successful and profitable binary options trading strategy in a moment can no more bring a profit, than also significantly reduce the trader’s exchange store of value. Money management in the segment of binary options is a set of actions aimed to make a profit as stable as possible and to minimize the losses in the course of trade.
The development of virtual networks and the availability of advanced technology offer great opportunities for beginners. In binary options money management or skilled capital management is the main key to making a profit.
Learning online trading is worth only on the basis of knowledge about money management. As with any subject, money management in binary options has its own rules.
Following these rules leads to the right asset accretion. The bottom line is constantly calculating and accounting risks.
How to reduce the risks using money management?
Adhering to the rules, you will be able to work with investments as you like. What do you need to enter into your development plan?
- Fixed transactions. Each must be for an amount that does not exceed 5-7% of the deposit. This also applies to the currency pairs, and oil, and precious metals. The rule is universal and works well in the long run.
- Identifying strategies and the exact percentage for each of them. For example, in a proven method 10-12% of the total capital can be invested, if you are almost totally confident in a favorable outcome.
- Entries in the trader’s diary. It is necessary to clarify the need to record all events, their characteristics. This helps to identify successful strategies for binary options in the short and long sales.
If you come to rate control and will follow the basic rule of investment, you will be able to minimize the risks. This conservative method of limitation leads to a slow but fairly stable and effective growth.
A million on binary options or bankruptcy at once?
The reason for most failures on the stock exchange is the human factor. When it seems that you need to hold on a little bit and get rich, the drain comes to hand. The most successful strategies of binary options do not give a 100% guarantee against losses. Many brokers advise not to venture the big amounts, investing 5-7% of the capital is considered optimal. If you bet $ 10, there should be $ 200 on your account.
The temptation to make a million in the binary options moves not only beginners, but also the pros. That’s why successful traders, who are simply fed up with small steps they make to the target, suffer from a deposit draining-off. It is difficult to pacify emotions and turn on the mind, it requires constant self-control.
Money management teaches us to think of the failures as of an integral part of trading on the stock exchange. Over time you will learn how to take them calmly. And at the risk of only 5% of deposit every time, you will be able to protect your money maximally. Understanding the mechanisms of market fluctuations gives invaluable experience. Money management when dealing with binary options helps to soberly assess the situation, to invest wisely and efficiently develop financially.
Structure of money management measures
- Determining the size of the deposit.
- Determining the ratio of profitability and risk.
- Income planning.
- Following the rules, aimed at minimizing losses.
- Profitability planning.
- Market analysis.
- Diversification of the rates.
- Keeping trade journal.
Learn, not to deviate from the rules and to practice cultivation – that’s what everyone should do, if decided to make good money on the stock exchange and currency pairs.
That’s all for now. Got any questions? Just ask the expert!