Binary Options are considerable more affordable than other ways of investment and trading, which has opened them up to an entirely different, wider market. In addition, the minimum amount that you can place in each trade is quite low as well, in some cases, even being as low as USD 1. It is essential to keep in mind that the amount of money that you invest will be directly linked to the amount of money that you would like as a return on your investment. This article contains some pointers that you should keep in mind when determining how much to invest.
Ask yourself, how much can I afford to lose?
The money that you choose to invest should not constitute any income that has a specific need in your life. Instead, you should only choose to invest your discretionary income, which is the money that you have left over once you have catered to all of your expenses. Money that you can afford to lose will not affect your standard of living or financial liquidity in the event that a trade does not go through as planned.
What feelings course through me when I invest?
Do you experience a thrill each time that you choose to invest in a CFD / Forexs trade? Or perhaps you feel fear and anxiety that you will lose the money you have deposited? Maybe you are even a little greedy and are simple in it to win it. Checking your feelings will let you know how much you should invest. If you think of an amount and your heart starts racing with anticipation or discomfort, it is likely that you are putting too much in. If, however, you choose an amount and feel confident throughout the entire transaction, then you are making a decision that you can live with.
What is the percentage payout?
As long as you are trading, then you are in it to make some money. The lower your deposit, then the lower your possible gain. In addition, you will find that in order to make profit, you need to have a high winning rate. A good number is approximately 70%. This means that in order for you to actually make a profit, you need to win just over 50% of your investment. When you invest a larger amount, and are able to make bigger minimum deposits, you will still bear the same risks, but, you will have better benefits. You will also be able to make more investments than you would with a lower amount.
Aiming for a percentage payout that is more than 70% would be ideal.
Do my bonuses constitute part of my investment?
Your bonuses and the amount that you choose to invest should not be put under the same umbrella, especially when determining their worth. The bonus is awarded to you, though making a claim to it so that it can be withdrawn as cash can be a little tricky. Instead of looking at your bonuses as an investment, you should refer to them as the means through which you can practice and improve your overall trading skill.
There is no fixed amount that you should trade, such as deciding to put down USD 100 for each trade. The amount that you finally settle on is entirely subjective, and depends on the criteria that you have outlined for yourself. A situation where your trading account has too much money is just as dangerous as having an account that has too little money. Keep what you need based on your trading behavior, and invest what makes you comfortable, and lets you sleep at night.