Advanced money management strategy for more experienced binary options traders. If you are a beginner trader, please refer to basic money management strategy. When the trading account grows and have more wiggle room for some creativity, these strategies are helpful provided you have fine tuned the basic money management strategy and disciplined to implement them every day.
Diversify: advanced money management technique
Do not put all eggs in one basket so to speak. Diversify asset, brokers and signal service wise. When you are making good profits in trading binary options, these become necessary for you to grow and lay down a good foundation even further.
Assets: As you already know, binary options can be traded for currencies, indices, commodities or stocks. It is recommended that you choose a minimum of two asset types. Most trade a combination of currencies and commodities like Gold, Oil in their portfolio. Not all binary options asset returns are equal and varies from time to time. Understanding the economics and trends of these underlying assets help you spread your wings and absorb more profits or minimize loss.
Brokers: It is good to diversify brokers for several reasons. Payout, welcome bonus, withdrawal process, their education and training materials, support are all unique to each broker. Pick atleast two brokers. For those traders whose full time income is by trading binary options are truly at the mercy of broker’s network, system and software. If for whatever reason, you cannot place trade due to a system glitch, you can always turn to the other broker. Think about that as a safety net. Besides your total portfolio is split and not stuck with one broker.
Signal Services: With the manual, semi auto and fully automated signals available in the industry, it is wise to take advantage of these services. You can invest time and money as your best bet advanced money management strategy. With the automated signals, you can let your account grow with some setups of the software. With manual or semi auto signals you can receive signals via email, text or Facebook. Combining these different types will help expand your profits faster. [More on this coming up soon]
End of week or month assessment
When you have diversified, it is a critical money management strategy to review which of the diversification or combination brings in more money. End of the week or month as your time and commitment permits, review your binary options trades to fix any poor performance or to say goodbye to them. Based on the pattern, you can adopt new combination or continue what is already successful. Keep fine tuning until all you see your profits are optimized.
Profits – Reinvest or withdraw
Here’s the make or break for your trading when it comes to advanced money management. Do you withdraw the profits or reinvest in the portfolio? If you are just starting out, I would recommend that you reinvest all or 80% back to your account. Allow your portfolio to grow so you have more trading power. Remember in binary options it is normal to profit 70-85%. Imagine what a $1000 can bring in when you trade consistently. Once you have a good nest amount in your account, then you can freely withdraw the profits. If there are more losses consider not withdrawing that week or month.
If you are overwhelmed with all the services available out there, feel free to check our offers and recommended signal services and brokers to diversify. I would be happy to answer any questions you might have. Contact me below.