Without a doubt, binary options are the most adaptable tool for online trading that is used by the overwhelming majority of advanced players. However, despite the positive aspects of working with binary contracts, this tool, as well as all other available formats of exchange trading, has one drawback – the high level of trading risks, which is often the main cause of unsuccessful trading outcomes. Against this backdrop, one of the main trading stability parameters for each player becomes the correct risk management. Binary options, according to their building structure, have a certain level of profit expectations, which does not allow us to consider this tool a 100% profitable format of trading on the financial market. With this in mind, we suggest you get to know the key metrics of risk management for binary options, and we will answer the question of how to make money on binary options without risk or with minimal losses.
Earnings on binary options without the risk
So, many novice players make their primary objective to search for binary options without risk. Of course, it would be very convenient to work in this manner. But this type of platform for trading simply does not exist. One cannot say that this would be a complete utopia – some professional brokers offer certain conditions for access to binary options without risk. But this is more about marketing than a standard trading offer. For example, the Binomo broker holds special promotions offering free options, or insures all trading risks on a certain number of trading contracts. In addition, VIP accounts can even be reimbursed their trading funds.
But, completely avoiding losses still won’t happen. Therefore, at the forefront is the optimality of the trading regime based on predicted losses of minimum amounts.
Risk management for binary options
As we’ve already said, when trading on the binary market there is a difference between profitability and losses – on average, the figure is 15%. This small percentage can lead to complete bankruptcy for the investor if preventative measures are not taken. Risk management for binary options involves the use of clear rules and parameters for calculating the volume of trading positions relative to the amount of operating capital. It is generally accepted that a trader achieves the safest trading mode when using contacts with the volume of involved trading funds at no more than 5% of the amount in their account.
Thus, market participants receive a minimum of losses and the ability to quickly restore their operating capital to positive values. In this way, the trading conditions offered by the brokerage’s platform take on significant importance. The fact is that only professional trading platforms provide market participants with conditions that give enough room for maneuvering in terms of risk management. The Binomo company is one of these brokerages, and they offer the most minimal metrics for trading conditions: an initial account for trading on the binary market – $10, the amount of the minimum bet – $1. Thus, a market participant can use the optimal metrics for risk management even with a minimal initial investment.
How to make money on binary options without the risk?
Despite the complexity of calculating trading risks, a safe trading mode is very simply achieved. To do this, choose an effective strategy for options with trading forecasts that are not below 80%. For example, here’s a system based on the Alligator and the RSI indicator:
When working on such a system, we can easily get profitable predictions at the level of 80%. That is, 8 out of 10 bets will bring a profit. Then, we use these rules of risk management for binary options:
- When trading binary contracts while working on the minimum account, we use bets that cost $1
- When trading on accounts with funds of over $100, we use bets with volumes of 3-5% of the amount of capital
Thus, we can easily compensate with profitable bets for negative factors of the strategy, and for negative expectations of options profits. The result is a stable trading mode with a minimal volume of losses that cannot cause serious damage to the operating capital.
Given the simple forms of risk management, binary options are a profitable and simple tool for private investment, which, in spite of everything, offers the most optimal format for working on the financial assets market.