Experiencing success with trading binary options is something that doesn’t come without a lot of hard work. First, you’ll need to educate yourself about binary options. Then you have to learn the ropes of actually trading. Eventually, you’ll have enough experience that the real learning can begin.
However, one very crucial step that has nothing to do with learning about binary options is simply making sure you have enough money to really give this opportunity its due. If you’ve ever asked, “how much money do I need to start trading binary options?” you’re about to get an answer.
Meeting the Deposit Minimum
As you probably know, you can’t begin trading binary options until you have a broker. Binary options brokers are inherent in trading, so there’s no point in trying to circumvent them. This means that the discussion of your trading budget must begin with binary options brokers. They demand a minimum deposit amount to begin trading and although it will be different for everyone, the industry average hovers around $200.
Therefore, just to begin trading binary options, you’ll probably need at least $200 (some brokers will accept less).
Gaining Favor with Your Broker
The other thing about binary options brokers that you need to understand is that they basically make the rules. It’s not as though you can just throw down $200 and then begin trading as much or as little as you like.
Think of it like a casino. A blackjack table may have a $25 minimum, but just because you have that much doesn’t mean you can start deciding the rules or what each win will pay out.
What we’re getting at is that $200 may get you an account, but no binary options broker is going to be overly impressed with that amount. This is especially true if you plan on making small trades (e.g. $5) at a time. Brokers will greatly limit the types of trades they’ll broker.
Furthermore, binary options brokers are famous for offering bonuses to attract traders who have the intent of actually trading often and in decent amounts. It’s worth holding off until you have more money to begin trading so you’ll also get bonus cash or some other perk.
One last word on binary options brokers: down the line, you may need to work with several. Much like at a casino, if you begin winning regularly, you could eventually get backed off, so spread your action around.
Considering Your Success Rate
Binary options trading is often described as investing where you have a 50/50 chance. After all, it’s binary:you have two choices. Of course, things are much more complicated than that. As you begin exploring various methods, you’ll find your chances of losing are a bit intimidating which is why brokers offer such high returns on wins.
Long before you ever begin trading live, you should be spending lots of time on demo accounts. Aside from the fact that they will give you invaluable practice, you’ll also get a sense for your win rate. This will give you a much better idea of how much money you’re going to need to invest in binary options in the long run.
As you can probably tell, it’s tough to give a hard-and-fast answer for how much money you’ll need to begin trading binary options. However, if we had to put a number on it, we’d say $1,000 should cover your initial deposit and give you a sufficient margin for finding your rhythm. This amount should also be enough to ensure you take it seriously, so you’re not losing because of trades that weren’t thought through.
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