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Risks control when trading binary options

Binary options as any other type of financial trade contain risk elements. You can lose all or part of your money at a glance in case you are not cautious or greedy. This way each binary options trader should be careful about the risks control concept.

Generally accepted rule of risk control

The rule of risk control accepted by professional traders is in the fact that at any moment the market should have not more than 5% of account funds. In simple words it means that in case you have an account for binary options amounting to 1000USD, you should have not more than 50USD on the market at any moment.

The trades in the sums greater than the aforementioned one is extremely risky especially due to binary options stand for the market of “everything or nothing” type

The binary options market does not remind Forex where you can decrease your losses at an early stage when you see that probably you might conduct bad trade. In binary options in case, your broker is not from those who return 15% of invested capital or you cannot sell the contract till the term of expiration (varying options), you are not lucky in case the trade goes bad.

This way you can be sure that you use correctly the only available ways of risk control.

How to calculate the risk when trading in the binary options market? 

In fact, it is quite simple to calculate the risk on binary options. For each 1000USD on your account for one time you can allow putting 50USD only. This way, your first step is to find and get registered in the broker, who allows you to place trades in frames of your risk acceptable appetite.

 

The brokers of binary options have made it very simple as that moment when the trader places a button for contract purchase it will see at once the price of this contract purchase.

He can’t lose more than he spent for the purchase of a binary options contract, that is why each potential contract provides at once the sum of risk together with prospect return. It allows traders to make all necessary steps to keep risk in acceptable frames.

The essence of all this is to protect your account from destructive consequences of loss in one trade, which has a lot of invested capital. Just imagine the situation when the trader with the account of 5000 USDS tries getting the payout amounting to 2000USD and invests 1000USD in the trade. If the trade is unsuccessful he will lose 20% from his account for just ONE trade!

You might think that it is an exaggeration, but you will be surprised about the frequency the retail traders are prone to the destructive emotions of greediness and get rich this way. Do not become the victim of one-minute wishes.

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