Binary Options investment amount definition

A binary option is a market where a trader either earns a considerable profit or loses their investment. It’s an all-or-nothing kind of trading market. 

So, even if you have a good knowledge of options trading, it’s better to fix an amount you want to trade. 

How much should you invest? 

Fixing an amount is the right way of trading in this moving market. But how much amount should you keep for trading? The trading amount differs for each trader because everyone cannot handle a similar amount of loss. 

You should never invest a considerable amount in binary options trading because you can either win or lose all the amount. Also, it would be best if you did not treat binary options trading as your savings. Additionally, this market is not a reliable option for earning for your future.

Best binary broker:
(Risk warning: Trading is risky)

Quotex - Trade with high profits

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Quotex - Trade with high profits

  • Accepts international clients
  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
(Risk warning: Trading is risky)

Rules for selecting trading amount

When trading in the options market, you can remember the 5% rule. This rule says that each trader should only trade a small amount of what they have in their bank account. This way, you can trade safely without putting your financial situation at risk. 

What amount can a trader risk on each trade?

The amount should not be more than 1%. For example, if you are trading using $100, you can risk between $1 to $2. Risking more than 5% will only bring loss

Conclusion 

Trading in the binary options market is not a form of investment but betting on a moving market. That’s why you should analyze the market and fix an amount before trading. 

(Risk warning: You capital can be at risk)

About the author

I am an experienced Binary Options trader for more than 10 years. Mainly, I trade 60 second-trades at a very high hit rate.

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