Nearly all who trade binary options utilize some form of strategy in relation to their investment amounts. Those who do not do this, ought to. The most basic, widely used strategy would be that of simply selecting one investment percentage and then using that same percentage each time. Typically, this percentage does not exceed 10%, but each trader will need to make his or her own decisions. Using this percentage, if your account had $1,000 in it at the time of trading, your investment amount would be $100.
Since the decision will be yours, consider for a moment what a reasonable number would be for you. It can be helpful to consider your trading habits and average trade volume. Keep in mind that a larger investment percentage won’t necessarily allow you to generate lots of profit quickly unless you happen to be trading well. You’ll need to account for some inevitable losses, and really need to think about just what amounts you are comfortable parting with, as no trader is going to come out on top 100% of the time.
Whenever using the same investment percentage for each trade, you are able to automatically provide some protection for your account funds. This will hold true regardless of your total account funds and trade volume. Should you feel that your percentage has been set too high, then consider backing down on the percentage until you feel more secure. Lower profit amounts can still get you to where you want to be, especially if you maintain a higher success rate and trade volume. In fact, many successful traders have used this type of investment strategy to help them reach their profit goals.
Remain aware of your success rate. You should be tracking this on a regular basis so as to know just how well you are trading. Brokers Options will provide you with a list of completed trades, along with the outcome of each. This list should help you easily determine your success rate. When you know you are trading well, then you’ll be better prepared to make decisions in relation to your investment percentage. The same applies when you are not trading as well as you’d like.
For new traders, be careful when making investment decisions. Binary options trading is going to provide you with the opportunity to generate fast profits. However, it is also going to provide you with the chance to generate some fast losses. Never make the mistake of assuming that any trade is guaranteed to pay off. There are no guarantees when it comes to asset price movement. Ever. Yes, you could always re-fund your trading account if you use up all of your trading funds, but wise investment decisions can help you to avoid this.
Investment amount decisions can be perplexing for all types of traders, and not only binary options traders. If you have no investment plan in place, now is the time to form one. The percentage plan is just one option to consider. However, you may have your own ideas about how to safeguard your trading funds while growing your profits. So long as it works for you, then all is well.