Wednesday, 7 February 2018

How To Apply Risk Management To Binary Options



It is easy to apply risk management to binary options. The predetermined losses make it simple to position size. All you have to do is to multiply your account by the percentage you want to risk. Assuming you have a $1000 account and you want to risk 5% you will do this:

$1000 * 5% = ($1000*5)/100 = $50

In other words, you will open your trade with $50 and that’s the amount you will lose if the worst case scenario occurs.

After that it comes down to your analysis and strategy, just like any other form of trading. The better your analysis, the stronger your signals the better your risk is managed. You never want to blindly enter a trade be it on a hunch, a tip or your horoscope. Binary options are highly speculative in nature and require proper risk management.

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