I suggest you use 1% per trade. Or 2% max.
Why not 5%?
What if you lose that trade? What if you lose 4 trades in a row? Are you willing to lose 20% of your balance like that? Are you sure you are gonna win the next 6 in a row to at least break even? Will you martingale 40% to recover?
I’m not a broker. I’m your friend. I don’t need you to trade high volumes and I want you to make money. I even suspect that the 5% idea that goes around this industry came from the brokers themselves. They want you to trade high volumes.
1% trades give you margin to recover your losses (those inevitable) in a healthy way. Success in Binary Options is about consistency, not speed. Do you prefer to make 1% of profit a day for 3 years or to make 10% a day only to blow your account a few weeks later?
I love this picture here. It illustrates so well a naked truth about Trading:
As I always say, the market is temperamental and sovereign. Sometimes it behaves in a way that goes against all logic. It’s obvious, because there are human minds, interests and emotions behind price; so of course it will never be predictable. Ok, having said that, it is obvious that we´ll never win 100% of the trades we take. So if we are trading reversal, for instance, every now and then we’ll have to make re-entries because price kept going and didn’t reverse exactly where we thought it would. If you trade as little as 1% of your account, you can re-enter that loss with another 1% with peace of mind. Lost that one too? (It will happen guys) So do 1% again! It would be the second martingale and you are only risking 3% of your account by now. On the other hand, if you were doing 5% plus martingales, Woooosh! Almost half of your account would be at stake over there.
Lost that trade too? Ok, don’t panic. You have two options here. Let it go and trade higher on the next juicy confirmed signal (you see how 1% gives you that margin?) or if you think that NOW that entry will win, you can martingale or use an amount to break even. We are talking about 4, 5 trades here not even risking 10% of your account. If you had started with 5% dear, you would have half of your account swept away by now or even worse, you’d have blown it.
If you are trading 1% and not martingaling instantly, you’ll have the margin to take 2%, 3% trades to recover afterwards, from other confirmed signals. It’s smart math. On the other hand doing 5%, 10%, 20% martingales is suicidal math.
I hope it helped guys. If you have a good trading system you can rest asssured that the market you give you enough juicy opportunities to recover your losses.
Ps: The only circumstance I think it’s fine to trade 5% is if you use my personal trick to keep a steady high winning rate as I teach in the Binary Options Lifestyle® System pack.
As a continuation of this subject, you can read my post “What is a healthy daily cap?”.