The decision of how much to invest in each trade can be a difficult one to make. Most are advised to never invest more than 10% of the total amount of funds in their binary options broker account. However, there could be times in which the trader wishes to make an exception. An analysis of the potential for the trade to end in the money is a must should a higher investment amount be being considered. Binary options trading leaves no room for guesswork or for basing trades on gut instinct alone.
No trading expert will ever advice that the entire amount of funds be invested on one single trade. If there is one thing that is certain in binary options trading, or any other form of trading for that matter, it would be that there are no guarantees. The one and only exception to this advice would be if the amount of funds remaining in the account is very low or barely exceed the minimum investment amount.
Even then, the binary options trader will need to really examine the trade and judge the likelihood of the trade ending in the money.
Traders need ideas and analysis to profit consistently
A solid plan for exceeding the recommended 10% would be to increase the amount based on risk assessment findings. Should the results show that there is a good potential to profit, the investment amount could be increased to 15% or more. Alternately, should the binary options trader realize that the trade will be very risky, the minimum investment could be decreased. Comfort level will also play a role. No trader should ever invest an amount that makes him or her feel uncomfortable.
Each individual must know their own personal limitations.
Binary options investment analysis can also include a look at how similar trades ended in the past. All traders are advised to track the outcome of their trades. In doing so, trends will become apparent. These trends can then tell the trader which trades to avoid and which to take advantage of more often. If a specific underlying asset and trade type has worked extremely well in the past, it would not be out of the question to assume that there is a good chance that it will be successful again. Such a situation could be grounds for exceeding the binary options broker minimum investment amount.
Again, the opposite must be considered should the results be mixed or show a negative trend.
Some traders are willing to take on more risk than others. No trader should ever feel pressured to take on more risk than they feel comfortable with. There is nothing wrong with not straying far from the minimum investment amount or following the recommended 10%. For those that do choose to do so, do so with a firm understanding that there is a chance that the trade will end out of the money. So long as the binary options trader is completely prepared to accept either a positive or negative outcome, there is no harm in exceeding minimum investment amounts.