Binary Options Money Management Method Part 2

Binary Options Money Management Method

After knowing various strategies associated with the risk of trading, you can choose one or several methods of money management that are available below:

1. The amount of Trading Profit and Loss
In this method, You take into account the limits for the number of trading profit or loss in the period. For example, you stopped trading after a day there are already 10 options that expire in-the-money. The current situation is less favourable, you decide to stop open option after a 5-time failures in a day. This method prevents you to overtrade. Besides being beneficial to Your psychological conditions, limiting the maximum number of options for successful or failed can also prevent the increase of risk of loss.

Suggested use of the method "number of trading profit or loss":

Low-Risk Strategy:
stop trading after 10 times profit, or
stop trading after 4 times the loss
Medium-Risk Strategy
stop trading after 30 profit, or
trading stopped about 10 times after a loss
Strategy Of High-Risk:
stop trading after there is 100 + times profit, or
stop trading there 30 times after loss
In determining the period of trading, you can customize it with the length of time that you want. For example, you can specify a period of daily if you are classified as a short-term trader.

2. The Percentage Of Losses
You can determine the maximum percentage to limit the level of losses that afford you the responsibility. For example, you stop trading when the amount of loss you have reached 20% of the total capital in your trading. Of course, the magnitude of this percentage needs to be tailored to the capabilities of trading and the magnitude of risk that can still be accommodated

Suggested use method "percentage loss":

Low-Risk Strategy:
stop trading after losses reaching 8%
Medium-Risk Strategy:
stop trading after losses to reach 15%
Strategy Of High-Risk:
stop trading after losses reaching 25%

3. The large number of Profit and Loss
This method has the same principle with the first money management methods. It's just that, you limit your options trading through the magnitude of profit or loss that has been achieved. So, you need to monitor the number of total profit option which expires in-the-money to know the limitations of your trading. For example, you decide to stop tradingsetelah from multiple option works, you have gained a profit as much as $50. 


profit and loss binary options

Not only on the options expire in-the-money, you can also set a limit on the losses to the failure option. To obtain the results of trading a more long term maximum, maximum loss better numbers set a limit lower than the profit. If you have a profit target in $50, then the limit of the losses can be specified in $25. This condition is also in accordance with the risk/reward ratio of 1:2, which has been widely used by forex traders manage their money management.

Suggested use method "the large number of profit and loss":

Low-Risk Strategy:
trading stopped after get the amount of profit as much as $50, or
stop trading after losses accumulated at $25.
Medium-Risk Strategy:
trading stopped after get the amount of profit as much as $150, or
stop trading after losses accumulated at $50.
Strategy Of High-Risk:
There is no limit to who wants to profit target achieved
stop trading after losses accumulated at $100.

All the above calculation does not follow the rule risk/reward ratio in 1:2. It can be Your kondisikan according to the wishes and the capabilities of your capital. The most important is to maintain Your profit target to always be at a higher level from the constraints of the disadvantage.

4. The overall number of Trading
In using this method, you implement a maximum calculation to the number of options you have open, regardless of the end result. No matter whether the option-option you have succeeded or failed, you will stop if the number of options has a maximum limit that meets you previously set.

Suggested use of the method "number of overall trading":

Low-Risk Strategy:
stop trading after 10 times open option
Medium-Risk Strategy:
stop trading after 50 times the open option
Strategy Of High-Risk:
There is no provision for limiting the number of options that can be opened. You can adjust yourself how many times you can place the option before deciding to pause.

5. The ratio of Victory
To get the appropriate victory ratio, you need to perform a calculation on a comparison between the frequency options are managed with the frequency option is out-of-the-money. The number of profit and loss that has been reached could also play a role here, because the calculation of the frequency of the winning option is already not the main determinant of positive victory ratio. This calculation is generally done by utilizing trader application Sheet. Further discussion about the ratio of victories you can check out here.

Suggested use the method of "ratio":

Low-Risk Strategy:
stop trading after a victory ratio was reduced at a level lower than 80%.
Medium-Risk Strategy:
stop trading after a victory ratio decreased at a lower level of 75%.
Strategy Of High-Risk:
stop trading after a victory ratio decreased at a lower level of 65%.

Some of the tips in the methods of money management at the top, among others:

Any numbers listed on each of the methods and strategies used is only an advice which can be used as a reference. You are free to set it according to the will and purpose of your trading.
Methods of money management that are mentioned are not to be used separately. You can use 2 or 3 methods at once to obtain the more calculations the maximum. For example, you limit the number of options that loss in 10 trade (the method "number of trading profit and loss"), and decided to stop trading if the number of options has reached 50 trade (the overall number of trading "method"). In practice, You will stop trading when the position option that loss has reached 10 trade, even though it was the maximum limit to the number of option on the whole was 50 trade.
All methods of money management that are written here has a function to prevent you from adding unnecessary trading risks. With the trading rules comply with the appropriate method, you will be freed from snares overtrade and obtain more consistent results.
To obtain maximum results, it is recommended that you always discipline in applying the methods of money management. Deviations from the rules that you have defined yourself will potentially disrupt the acquisition of trading binary options and reduce the effectiveness of the money management are applied

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