Friday, December 19th, 2014 by Michael Freeman
Perhaps one of the least mentioned areas when it comes to trading online with binary options would be proper account management and risk prevention. Some of you wouldn’t believe the number of emails I receive on a weekly basis concerning trading strategies and broker reviews but hardly do I ever receive emails concerning proper management techniques with binary options. Today we are going to focus on a little risk prevention and talk about the two styles account management that should be applied when trading online with binary options.
Passive Binary Options Account Management
Passive account management is the best style of account managing when you are just making your first splash in the binary options industry. Passive binary options account management is also great if you are a strategy guru and like to test new trading strategies, with passive account management you only invest a maximum of 5% of your capital per trade and a maximum of 15% all at one time. Meaning that you can invest a max of 3 trades all consisting of 5% of your capital with a maximum of 15% total all at one time. No more trades can be placed until one of your other trades expire first, remember, this is the passive and most reliable style of account managing. Many novice traders join the industry thinking that it is going to be a cake walk and they are going to make hundreds if not thousands per week but little do they know this industry is one of the most difficult trading industries to be successful in.
Aggressive Binary Options Account Management
Aggressive account management is a form of management that I strongly feel like should only be applied by experienced traders. Aggressive binary options account management is simply doubling the values we use with Passive account management. Meaning that you can only invest a maximum of 10% of your capital per trade with a maximum limit of 30% invested at any given moment. If more than 30% of your funds are out at any given moment I would classify that as overtrading and that should never happen, overtrading is a trader’s worst nightmare. Although this style of account management is not recommended by most I tend to solely use this management style and have seen nothing but amazing, big profit results.
When it comes to trading online with binary options it pays off in the long run to properly manage your trading account. Statically if I would have to guess 6 out of every 10 trades blow through atleast two broker accounts before changing their risk management techniques along with game plan. Before investing with any binary options broker, ask yourself, “What style of account managing should I utilize and what three trading strategies should I be using in order to harvest the maximum and best trading signals?” Keep in mind that binary options is a lot like a marathon, not a sprint. Take your time and constantly stay hungry for learning new breakthroughs that could help your ability to profit more with online trading. If you have any questions or comments regarding this article please feel free to leave them below and I will get back to you as soon as possible!