How To Protect Your Money In Binary Options Trading
While engaging in binary options trading you will need to know how to protect your money.
As Warren Buffet says there are two rules of trading.
Rule number one: don't lose your money.
Rule number 2: Refer to rule number one.
Great advice from the world's number one trader so no one can really argue with that point.
The reality though is that there is no 100% safe trading system that has yet to be invented.
So to protect your money here are some ideas.
1.
Remember that binary options and any type of options trading for that matter is speculative in nature and there is always risk.
Understanding that should hopefully cause you to be careful in the investments you choose.
2.
Never use more than 10% of your cash in trading account.
Remember the key word here is CASH.
Don't use credit cards or lines of credit to invest.
As I said before with any investment there is the potential for loss.
If you use credit to invest and you suffer a loss you still have to pay off your debt.
If you win the trade, you still have to pay off the debt and you won't be able to enjoy the money you do make.
If you have to save up money in order to be able to use cash as opposed to credit to invest with well that's what paper trading is for.
3.
No trade should take up more than 35 to 50% of your trading account.
You always want to live to see another trading day.
If you throw all your eggs in one basket you can get your trading account wiped out should a trade go against what you anticipated.
4.
Withdraw only 10 - 20% of your winnings.
This can help you pay your bills or take your significant other out to a nice dinner.
It will also leave money in your account that you can use for more trading and to possibly cover future losses that might incur.
5.
Choose a broker that gives a 15% refund on a losing trade.
With binary options being all or nothing types of trades you can either win big or lose the whole investment.
With a 15% refund should you lose the trade, needless to say you get to keep some of your money.
Most other investments you simply lose your money and you are possibly subject to a margin call.
In closing remember to always do what you can to protect your money and you will hopefully have a long and profitable trading career.
As Warren Buffet says there are two rules of trading.
Rule number one: don't lose your money.
Rule number 2: Refer to rule number one.
Great advice from the world's number one trader so no one can really argue with that point.
The reality though is that there is no 100% safe trading system that has yet to be invented.
So to protect your money here are some ideas.
1.
Remember that binary options and any type of options trading for that matter is speculative in nature and there is always risk.
Understanding that should hopefully cause you to be careful in the investments you choose.
2.
Never use more than 10% of your cash in trading account.
Remember the key word here is CASH.
Don't use credit cards or lines of credit to invest.
As I said before with any investment there is the potential for loss.
If you use credit to invest and you suffer a loss you still have to pay off your debt.
If you win the trade, you still have to pay off the debt and you won't be able to enjoy the money you do make.
If you have to save up money in order to be able to use cash as opposed to credit to invest with well that's what paper trading is for.
3.
No trade should take up more than 35 to 50% of your trading account.
You always want to live to see another trading day.
If you throw all your eggs in one basket you can get your trading account wiped out should a trade go against what you anticipated.
4.
Withdraw only 10 - 20% of your winnings.
This can help you pay your bills or take your significant other out to a nice dinner.
It will also leave money in your account that you can use for more trading and to possibly cover future losses that might incur.
5.
Choose a broker that gives a 15% refund on a losing trade.
With binary options being all or nothing types of trades you can either win big or lose the whole investment.
With a 15% refund should you lose the trade, needless to say you get to keep some of your money.
Most other investments you simply lose your money and you are possibly subject to a margin call.
In closing remember to always do what you can to protect your money and you will hopefully have a long and profitable trading career.