Binary options risk management 2020 - basic rules and strategy

Binary Options Risk Management 2020: Why is Good Preparation Important? Know the risks. Test Broker & Strategy now.

Binary options trading was finally established in 2012 and will continue to be an interesting alternative to Forex or CFD trading for many private traders in the coming year. Excellent returns and low entry barriers attract many investors. With all the euphoria and fun of trading, especially as a beginner, you shouldn't ignore the topics of binary options risk and strategy.

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No risk, no profit

Just like everywhere in trading, you first have to familiarize yourself with the topic of binary options in order to be successful in the long term. Opinions are circulating that money can be made quickly and easily with binary options with little start-up capital. Whether binary options Wall Street Trick or other dubious sources of information - the topics of risk and strategy are rarely dealt with. Sustainable profits without strategy and risk management are also unrealistic with binary options, just like in CFD and Forex trading. There is no binary options strategy with 100% probability of success. Losses are also part of everyday trading with binary options and you should learn to deal with them. However, with a strategic approach you can influence the probability to a certain extent in your favor and thus successfully trade binary options.

Binary Options Risk Management Basic Rules

In principle, the willingness to take risks is with every trader differently and accordingly you should also align your binary options strategy. The level of risk also depends on the size of the trading account - it is obvious that the risk can be managed more effectively with larger trading accounts. For small accounts from 100 to 500 euros, the broker's minimum trading amount alone often means that you cannot afford a long series of losses.

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Binary Options Risk Management Strategy - Binary Options Education

Not Put everything on one card

For accounts from 500 euros it is recommended, if possible, never to risk more than 5% of the trading capital in one option. Golden risk management rules from the forex sector even recommend using only 0.5% to 2% of the capital. With correspondingly large trading accounts, this is of course also advantageous for a binary options strategy.

Unlike in forex trading, the risk in binary options is not defined by the selected stop, but by the trading amount used. Therefore, there is no stop at binary options - settlement takes place at the end of the term.

Trade binary options - with these 5 steps to the first trade

The first trade, a high possible return and Countless exciting, available strategies - as tempting as the options in binary options trading may be, these are highly speculative financial instruments that, in the worst case, can result in the loss of all of the capital invested. It is therefore particularly important to get detailed information right from the start. Nevertheless, beginners should be able to start trading without detours if possible. Therefore, the following slideshow summarizes the most important facts and shows how traders can get to the first trade in just five steps.

Small accounts require adjustments

Practically all brokers require certain minimum trading amounts, usually between 10 and 25 euros. With small trading accounts, this means that the above-mentioned risk management rules cannot be adhered to. But by choosing a broker with low minimum sums, you can achieve slightly better conditions. For example, with the broker BDSwiss, 60 seconds trading (more information on 60 seconds trades) is possible from 1 euro. For example, even with an account size of only 200 euros, you can still manage the binary options risk relatively well.

Very aggressive binary options traders sometimes consciously use small accounts and low minimum trading amounts to deal with martingale or anti-martingale strategies, also known as "Double Binary Options" to achieve rapid account growth with the appropriate risk. If the strategy goes wrong, capital is paid back into the trading account.

These binary options strategies are very risky and each trader has to assess for himself whether he consciously wants to risk his entire trading capital or prefers a longer-term orientation.

Regardless of the observance of some basic risk management rules, we also recommend that you acquire some trading strategies for binary options.

Read on with our broker reviews

  • BDSwiss fraud, rip-off or serious?
  • Our anyoption experiences
  • Our 24option experiences
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