One if most important parts when it comes to trading is risk management. One thing is certain and that is, you will lose some trades. It has nothing to do with how good you are or bad(although good traders will have less losses), you will lose your trade eventually. I would not recommend doing trades that are too risky, it does not take alot to lose money. One of most important things when it comes to risk management is size of positions.
WHAT YOU WILL LEARN HERE:
- What is binary options risk management?
- Why managing risk is that important?
- Example of risk management in binary options
- 3 TOP tips for risk management
WHAT IS BINARY OPTIONS RISK MANAGING?
It may sounds easy but it is far from that to use such system. Why? Only because it takes alot with power of will and self control to make yourself an effective risk management plan. If you want to be successful trader, you will need to make one for yourself. You just have to stick to rules, no matter what.
WHY MANAGING RISK IS IMPORTANT?
This one is easy you will see! It is because you will otherwise be without money in your account, it will be gone fast. Which means, if you have no money in the account anymore, you can not profit anymore and make the account bigger in size. It is hard but it is also better to stay in the game then not being able to trade.
RISK MANAGEMENT EXAMPLE
First you need to have in mind how much you are willing to risk. Secondly, you need to check how much you have in the account.
Let us say you have $1.500 and you want to risk only 3% of that.
FORMULA:
1.500 (This is our account size) * 0,03 (percentage value of your risk/100 ) = $45
Your risk ratio per trade is then 45$ and that is the max amount you are willing to lose per trade.
3 TOP RISK MANAGEMENT TIPS
- You have to get the knowledge. Do not fall for saying such as trading is easy and anyone can do it. But it is managable if you dedicate yourself to it. That is why you need good plan for risk managing.
- Do not invest more then you can afford to lose is also important tip to have in mind. You do not want to lose everything and not being able to trade at all as we said. You have to customize your account trading in such way that you will be able to survive thorugh losing streak.
- Follow people who are having expirience in trading or join our community.
FINALE
To conclude everything. You need to be very focused on your trading plan and start slowly and build up. Trade with what you are comfortable and do your research and it is better if you think at the worst scenario so you prepare yourself. It is a thin line beetwen profits in binary options niche then losing the money.