Binary Options Money Management. The formula to remember.
What is the right formula to better manage money with binary options? In this article, we give you the “magic” formula for succeeding with binary options.
Proper money management in binary options is certainly the basis for successful trading. As has happened to us, many of the new traders underestimate good and sound money management right from the start.
Not even applying the minimum money management inevitably leads to the loss of the entire capital they had available for trading.
How to do?
There are very specific rules that we must follow, we cannot improvise trading on our imagination or perspicacity in guessing the direction of the charts.
First of all, we can create a table to always keep in view what may be the best investments, always ready to follow what we had planned. We are practically applying money management to our trading; we simply have to follow a logic to minimize the risk in investments.
The set of operations to be done before undertaking any job is called money management . Money management is planning the steps needed to predict success before investing your money. A precise plan is made outlining the necessary expenses, the risks that will exist and the difficulties that can be encountered.
An initial program must always be made as a function of an investment, this applies to life as well as to work. We want to try trading, well, so why don’t we plan well before embarking on what could really become a delightful job for us ?
We must be ready for investments in binary options.
The magic formula
Money management binary options: the magic formula
- Earning with the internet is now everyone’s dream, earning from home, without going to the cold or hot to work, comfortably seated in our armchair at the computer.
- What should we foresee so that our trading can become a pleasant and constant commitment ?
- What are the factors that will affect trading? There is certainly the money we need to invest, but we will see that it will be easy to plan everything well for maximum return.
- What we have to put in mind instead is to absolutely follow our initial plan.
And the magic formula? ?
The figure illustrates well what factors will make it work.
Let’s not go to the computer without being calm, we must not be distracted, the opportunities for entry are sometimes unpredictable, we must always be ready and for this we must be calm.
Peace of mind in trading is very important; stress, nervousness and distractions have always been at the root of the losses. The risk is also a function of our psychological well-being.
We give 50% importance to serenity in trading ; half of what is needed for constant profits lies in our well-being.
Money Management : weighted risk management, investment planning, precise calculation of the amounts we have to invest. Money management is fundamental, we cannot delude ourselves to succeed in binary options without knowing very well what the difficulties we will face will be.
There will be losses, as well as bad times, surely; we must be able to deal with them knowing that our initial planning was correct.
the technique we will use in trading will have to be tested for a long time before starting with the real account. Only when we know that the percentages of positive closes consistently outweigh the negative, only then will we apply it in our trading.
Strategy is therefore not the key to trading success; however, we must have good technique and always respect it.
So let’s look at what is the basis for correct capital investments.
This topic has already been addressed by us several times; here we want to analyze with you the percentages that we always use to operate.
If after seeing and considering them you think that your way of trading can be varied, this is fine; important that the choices are made before starting, not after the defeat! ?
3. Money Management
Calculation of correct investments in binary options
We have already proposed what for us is the right investment in relation to the capital we have available, a plan created from experience for the best ratio between investments and risk calculation.
The table below is ours, they are valuations that come from years of trading on binary options. It will be better to print it or create one yourself by modifying it but always trying to follow the best money management well.
We propose it again and analyze it well, evaluating each of our choices in depth.
MONEY MANAGEMENT PERCENTAGE TABLE
2/3% of the capital
We make a single investment waiting for the optimal conditions of our strategy. It is the classic single investment on a trade. The recommended percentage is the correct one, it may certainly seem low but it will be the one that will allow us the best MoneyManagement.
Consider that after a few consecutive losses the capital, the amount of money available, decreases. However, we remain with the same percentage , it is better not to increase it even if we do not reach the amount of the first investment.
4/5 of the capital
We see favorable conditions because multiple assets move in the same direction as the price of an asset changes . The direction of the asset therefore influences the other assets, they go together as this varies.
Be careful because in this case there is a risk of losing investments if the direction were to change suddenly; however, if management continues, we may have In the Money closures of all investments.
6/7 of the capital
The percentage invested is rising; the consideration we must make is that we are making more investments on conflicting assets, therefore they are not moving in the same direction as a function of the same asset.
We made the investments in the short term of a few seconds with the same hourly closings. It is unlikely that the closures are all negative; the directions of the various assets were correct, the strategy indicated according to the rules, we are calmly awaiting closure.
6/7 of the capital
More investments within a few seconds on different assets. The directions are in agreement and therefore depend on a single good. We have chosen assets that can influence each other as a single asset varies but the hourly deadlines are different.
Also in this house an investment of about 6/7% will be correct, the probability of negative closing of the various investments is highly unlikely. The considerations are right if you have tested your strategy for a long time and are sure that it is okay.
9/10% of the capital
Undoubtedly a fairly high percentage for investments at the same time relative to the capital available, but let’s make some considerations. We invest in conflicting assets, so the direction of which does not depend on the variations of a single asset.
We have different maturities for various investments, the probability of negative closing of all investments is extremely low. Unpredictable cases of reversal of directions on all trades may also exist, but the investment percentage is possible.
Money management binary options: the important factors
We have deliberately reported what our investment system has been for a long time now . Our calculation was made to always have a basis to follow, we think it is good money management related to risk.
By following the tables one can only grow with capital; sometimes it will take a lot of patience, but other occasions will be rewarded by great contemporary closures.
Always remember the factors that will most affect your trading.
Serenity, money management and a strategy that works will be the magic formula for achieving great results.
Don’t forget to read the page dedicated to money management in binary options (click HERE ).
On the page you will find all the tips for the correct money management on binary options and also the Kelly formula. A system for establishing the correct amount of investments relating to the available capital and the probability of winning.
Happy trading everyone!
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Author: Giancarlo Griscenko
The brothers Giancarlo and Roberto Griscenko, former hosts of the Italian site forzaforex.it share their experiences with English-speaking traders on FreeBianryOptions.one, with strategies, indicators and numerous valuable guides
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