Money management for binary options: 7 rules that protect your capital

The 7 rules

• 1. Decide your risk per trade before you look at the chart. Keep it small and fixed.
• 2. Set a daily loss limit and treat it as final.
• 3. Set a daily profit target. When you reach it, stop and keep the profit.
• 4. Cap recovery trades. Never keep doubling to chase a loss.
• 5. After a run of losses, pause. Take a break before the next trade.
• 6. Never trade money you need for rent, food or bills.
• 7. Review your trades every week: win rate, average trade size and rule breaks.

Why a profit target is part of risk management

Many accounts are lost on a day that started well. A profit target gives you a reason to stop while you are ahead. RiskQuo shows how much profit is left to reach your target, and suggests a smaller trade when you are close, because a bigger trade adds risk without helping you finish sooner.

Make the rules hard to break

Rules that you can change in the middle of a bad session will be changed. That is why RiskQuo lets you lock your loss limit for a day, a week or a month, and starts a cooling-off lock when the daily limit is reached. The point is not to punish you. It is to protect the version of you who made the rule.

Frequently asked questions

Related guides and calculators

• Binary options risk management: a beginner’s guide
• Daily loss limit: what it is and how to set one
• How to stop over-trading: 6 practical steps
• Binary options risk calculator
• Trading money management plan