BinaryOptionRobot allows you to change three characteristic of its trading process. For each of these features, find the BinaryOptionRobot best settings here:
Simultaneously the most basic and most important setting for BinaryOptionRobot, the investment per trade defines how much BinaryOptionRobot invests on every signal.
With this setting, it is important that you employ a solid money management. We highly recommend to never invest more than 2 to 5 percent of your overall account balance per trade. Many traders make the mistake of investing too much on a single trade, thereby getting themselves into a position where an average losing streak can eat up half of their capital – a blow they can’t come back from.
With the chance to manage your investment per trade, BinaryOptionRobot allows you to increase your investment as your overall bankroll increases and decrease your investment after a losing streak.
Assuming a 2 percent investment per trade and an account balance of $500, you should invest $10 per trade. As your account balance increases, you can increase your investment. When you reach an account balance of $1,000, your investment should be $20. In case of a losing streak, you should reduce your investment again. Do not shy away from using odd numbers if they fit the percentage you want to invest.
We generally recommend to start with an investment of 2 percent per trade and increase this amount as you get more comfortable. If in doubt, choose the smaller amount, and never go over 5 percent.
BinaryOptionRobot’s stop loss feature allows you to stop trading for the day after a certain number of losing trades. In theory, this tool aims at helping you to sit out long losing streaks and rejoin the trading process when the odds of winning a trade are higher. In reality, though, things are more complicated.
Treat the stop loss feature with caution – if you are doing everything right, you are better off without it.
Whether it makes sense for you to use the stop loss feature depends on your money management. With a textbook money management, where you invest the small percentage of your overall account balance that we recommended in the previous point, the stop loss feature is unable to help you.
Only when you either invest too much on a single trade or want to leave your account alone for long periods of time, using the stop loss feature makes some sense. In this case, you can use it to limit the number of trades before you check your account again.
In any case, disable the stop loss feature. The reason for this recommendation is that your chances of winning the next trade are always the same – regardless of whether you have lost or won the last trades.
Therefore, stopping trading after a few lost trades can not help you to win a higher percentage of your trades. It can only delay the time until you win a trade again.
We recommend to keep the stop loss feature switched off. Instead of using the stop loss to make up for a faulty money management, you can achieve better results by employing a solid money management.
Similar to the stop loss feature, reverse trading is a feature you should stay away from.
With reverse trading enabled, BinaryOptionRobot will do the exact opposite of what the current signal predicts. This means, if BinaryOptionRobot’s algorithm indicate rising prices, BinaryOptionRobot will reverse the signal and invest in falling prices. If BinaryOptionRobot’s algorithm indicate falling prices, BinaryOptionRobot will invest in rising prices.
Such a way of investing makes little sense. From a mathematical standpoint, there is no chance a reverse trading option will help you – ever, with any robot.
The simple reason for this statement is that binary options allow only two options – rising or falling prices. In the long run, random signals would generate the same winning percentage as a coin flip – 50 percent. Even the worst robot in the world must therefore be right at least 50 percent of a time – long term, nobody can get below this value. Reversing signals with a winning percentage of 50 percent would get you exactly the same – 50 percent. In the worst case scenario, reversing signals makes no sense.
Now, BinaryOptionRobot uses a team of experts to generate signals. If these experts can increase the average winning percentage at least by 1 percent, reversing the signals would cost you money. Instead of winning 51 percent of your trades, you would only win 49 percent. Instead of winning 60 percent of your trades, you would only win 40 percent.
Never use reverse trading, anywhere.