Binary options trading is an
investment of your funds
. If someone forgets this, the loss of the deposit is inevitable. Like any investment portfolio requires risk diversification, so does your deposit in binary trading.
In order to properly distribute the risks, the trader must
divide his deposit between different assets, types
of options. The division of the deposit depends on the level of risks that the options trader wants to take, and on the binary options strategy that he uses.
What parameters are considered when dividing the deposit?
[list style=”check”]
- Asset payouts
- Expiration time
- Liquidity of the asset
- Type of option
- Binary Options Strategy
- Earning Opportunity[/list]
All these parameters affect the risks that are present during trading. So on the basis of trading turbo options is considered to be trading with a high level of risk, but it can bring results within one minute. Or trading on forex instruments is considered with less risk and also with lower payments, similar to contract trading.
Dividing the deposit by risks:
Trading risks depend on time periods. Therefore, the more time frame we choose, the lower the risk during trading, and, accordingly, the lower the payout. In order to find a balance, we can divide the deposit by time frames (time periods).
[list style=”check”]
- 1/3 Long-term month or more
- 1/3 Inside Daytime
- 1/3 Turbo or high-speed bidding[/list]
Such a division of the deposit allows you to control risks and earn as much as possible. You can also find the most suitable strategies for different time formats.
Dividing the deposit by type of trade
Some professional traders divide the deposit depending on trading opportunities and strategy. In the market, you can prepare for some opportunities, some appear suddenly. The division depends on the opportunities that we want to use.[list style=”check”]
- 1/3 of the Deposit is used only for trading on economic events
- 1/3 Trading with a maximum expiration of up to a month
- 1/3 Inside day trading.[/list]
As you can see, this is logical. If there is news or an event has occurred that has greatly moved the market, and you do not have money in your account since everything is in work, it means that you have missed the opportunity to earn. It is important to understand that you need to work in a complex, and not look for the only opportunity to earn once.
In order to properly distribute your deposit, you must write a trading plan for a month with a clear definition of goals. By using one of the ways to divide the deposit, you will reduce your risks and turn binary options trading into an investment.
Conclusion:
In order to start
making money with binary options, you need to treat trading as an investment
. To do this, you need to take into account all the rules for investing in financial instruments. The use of different strategies for binary options and the calculation of risks during trading will make an amateur, a professional.
Proper planning of binary trading will help you understand all the nuances of binary options trading.
Tagged with: Money Management • Risk management
