The 5% Binary Option Investment Rule

With any form of binary option trading your goal as an investor or trader is to win more trades than you lose. Let’s face it, you will never win every single trade you take, no one does, all traders will experience losses at some point, however your aim is to have more success.

For new or inexperienced binary options traders we recommend you keep your trading consistent and help remove emotion for your trading decisions by risking no more than 5% of your account balance on any single binary option trade.

You may have heard of the 2% Rule before that many traders use when trading the stock market, however we find this is not appropriate for binary option trading given binary options tend require a lot less trading capital compared to traditional trading in the share market.

Here is an example of the 5% rule to give you an idea of the maximum size of each trade you should be taking based on your account balance with your binary option broker (please keep in mind that all brokers have a minimum and maximum single trade size, please check with your broker) -

Account Balance Maximum Investment Per Trade
$100 $5
$200 $10
$500 $25
$750 $38
$1,000 $50
$1,500 $75
$2,000 $100
$5,000 $250
$7,500 $375
$10,000 $500
$15,000 $750
$25,000 $1,250
$50,000 $2,500

 

Your capital is at risk.