Home Money Management – Binary Options

Money Management – Binary Options

Beginners often have very radical and rustic trade practices. The main reason is that they are not familiar with concepts like money management or risk management. A typical error is the allocation of capital. Many try to make a single trade with the big money.

That this does not usually work that newbies notice quickly. Anyone with an account balance of € 2,000 is equal to 500 euros for a trade that will realize how fast the capital may be gone. Even when you win, of course, brings large sums; we can assume that high risk is rarely rewarded, as in sports betting.It is of course different.

The credit on the account can go through risky trades consistently quickly to € 20,000 or € 30,000. It would be a big mistake to think now that one is a good trader. In the end, you have only been lucky. These gains are often also the start to ruin – because whoever loses it, which is always set higher, sums to regain the lost money back. A dangerous project. A good trader is successful if he pursues a degree of trading discipline and equips with the basic knowledge.

Therefore, at the beginning should be a maximum of 1 to 5 percent of the capital are set per trade. For those that already have a very high capital, which is usually always around 0.5 to 1 percent of the total capital. You should put on different horses, especially in binary options. Even fast and confident of victory horses can have a bad day and just finish second.

Some important tips:

You should definitely not looking at the big win binary options and consider again the money management. Not more than 5 percent of capital per trade – everything else is too much risk. We must not assume that all trading activities, which have been set, will be profitable.

Thus, it is important that throughout the losses to be scheduled. In addition, one should trade on no account out of sheer boredom or with the fact that “today really want to make money.”

One should only be trading very well, if you are convinced to make a profit. In addition, talk about the market to acquire a basic knowledge as well as observe the market in advance, before you frantically divides his capital. Note again – never invest more than 5 percent of the credit in a trade. Fast horses can also lame!

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