The Best Money Management Strategies
Before we get started, let’s talk a bit about discipline. Yes, this is your money and yes, you can do what you please with your money but, if you’re committed to making more money with Binary Options Trading, you’ll apply discipline and follow these strategies to the letter.
Below is a list of the best Binary Options money management strategies. It’s up to you which strategy you’re going to use, so read carefully and choose the option that suites you best.
These strategies focus on different winning or maximum losing requirements and limits. The basics are, as soon as you reach a certain limit, you’ll stop trading no matter the amount you’ve won or lost.
Advanced traders should skip this ago go straight to Trading Binary Options Based on News(link to article), intended for the more experienced traders.
Wins and losses numbers
This is a very common strategy, should you use this strategy, it’s best to have a proposed number of wins and losses for every day. Once you reach this limit, stop trading immediately.
Example: Should you choose a number of 10 wins per day, once you reach this limit you’ll stop your trading. This is to prevent you from getting caught up in the heat and enthusiasm and thereby becoming reckless in your trades.
This is the most common reaction among financial traders, so don’t underestimate it.
The same applies to your amount of losses per day. Once you reach (let’s say) 10 losses for the day, stop trading! This is so you don’t lose 100 times before you make 10 wins. This never happens, so it’s overdramatised a bit.
This way you’ll stop at either 10 wins or 10 losses, which is to prevent you from running after your money, something that else that’s most common among financial traders.
Losses percentage
Almost the same as the above example, only this time you won’t limit yourself to any number of wins and losses. Instead you’ll limit yourself to a certain percentage of your trades being unsuccessful.
Let’s say you choose 20% losses, you can go up to 100 trades and only reach this percentage, the same can be said about 10 trades. This time you’ll stop for the day after reaching this percentage level.
Amount of wins and losses
Again, almost the same as above, only this time your limits are based on no more than $X won and no less than $Y losses. Once you reach either limit, you stop for the day.
Should you choose $100 won and $50 loss, as soon as you reach either one you stop, whichever comes first.
It can be hard to stop, but running after your money is a very bad idea. It’ll make this worse as most people are quite emotional in these situations. That’s why online marketing is about being rational and objective.
Number of trades
Here you stop after a number of trades, whether you win or lose. You can combine this strategy with any one of the above strategies.
The Winning Ratio
The last of the strategies is to watch your winning ratio. Should the winning ratio drop below 80%, stop trading immediately. Calculate your winning ratio after every trade you make. Use an Excel spreadsheet in this case.
Strategy Risk Levels
The best winning ratio based on the above strategies are determined by the level of risk you want to take, below are the recommended rates and percentages for the strategies above for a low, medium and high risk levels.
The Low risk strategy
This is for those of you who doesn’t wish to take high risk just yet. This results in fewer profits but fewer or no losses at all.
Number of wins and losses.
Percentage of losses.
Stop trading after 8% losses.
Amount of wins and losses.
Winning ratio.
Stop trading when the winning ratio becomes less than 80%.
Number of trades.
Stop after 10 trades.
Medium risk strategy.
If you aren’t sure whether or not you want to go all the way, use medium risk. Here you’ll make great extra money.
Number of wins and losses.
Percentage of losses.
Stop trading after losing 15% of your trades.
Amount of wins and losses.
Winning ratio.
Stop when your winning ratio becomes less than 75%.
Number of trades.
50 trades, stop trading.
High risk strategy
For those of you who aren’t afraid to lose huge sums of money with the possibility of making very big profits, fast! Only use this when you become an expert Binary Option Trader.
Here, allows a bit more flexibility and have the limits more loose (defined by the + sign).
Number of wins and losses.
Percentage of losses.
Stop when you lose 25% of your trades.
Amount of wins and losses.
Winning ratio.
Stop when your winning ratio drops below 65%.
Number of trades.
You can trade as much as you want, but choose a limit from the ones mentioned above.
Guidelines and General Tips.
You may choose to use different numbers and percentages than the ones used in the examples above, but still within the same range.
For beginners, it’s recommended that you use the limits in the above examples. You can always establish your own limits later as you gain experience.
Remember to always stick to these limits no matter what happens. This is the only and most important rule, stop trading as soon these limits are met
And that’s it, as easy as that. Just remember, a proper Binary Options Trading money management system is essential and will help you become a winning trader. This is by far the best advice and will help you make a success of your trading.
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