The minimum deposit is one of the major key points for traders when they decide to register with an options broker. Some traders like to stick to low minimum deposits of $1-$10, but the truth is, the lees you deposit, the less your chances are to win major profits. The minimum deposit or the money you invest in your separate trades is proportional to your winning odds.
Nevertheless, the secret is how you distribute your deposit on single trades. For example, nowadays you can deposit as low as $10, and you can invest in trades by investing only $1 at IQOption. The proportion between the minimum deposit and minimum option value is, therefore, crucial since it allows you to maneuver in the market without running dry on the money. It is important always to keep the account liquid in order to avoid a zero balance. This enhances the chances of winning despite low deposits.
Trading with Low Minimum Deposits
Back in the days, trading binary options was only efficient when investing large sums of money. It was hardly imaginable to win significant returns unless your deposits were 3-digit, no matter how low the given minimum deposit was. Today, with a good leverage policy, binary options traders can actually win noticeable money through trading. Binary options is probably one of the rarest industries where you can earn money even if you do not invest big.
Investing small is also a preventive measure for new traders who probably cannot afford to lose all of their investment in their first round of trading. Therefore, they invest small until they master their trading skills. The natural course of events unfolds in the way that binary options traders start to invest larger amounts and switch to more advanced accounts within a certain period of time. They usually upgrade to better accounts with more possibilities which come with bigger deposits as well. Sometimes it is a $100 trading account, while other times, the minimum deposits go beyond three-digit amounts. In this way, traders are working their way up in the market increasing their winning odds with better or more advanced accounts and with higher investments.
The trading circle moves in the following order: bigger investment-bigger risk-bigger winning odds. Once traders are confident with their trading skills and their market knowledge, they are willing to enter “the real deal” by investing big bucks to have bigger returns.
It is quite logical; binary options are all about maximum return rates which can go as high as 80%. According to this logic, of course, you will get back more when you deposit more. Let’s assume you invested $100 in a trade, and you won whereby the return rate was 80% which resulted in $180 in your trading account. This is still a significant success, whereby investing $1, would have gotten you $8 with the same return rate, which is still a good result, but yet not a satisfactory sum.
Of course, if it is a losing trade, then, it is better to lose $1 than $100. The conclusion we can draw from this is that traders should estimate when and how much to invest int heir individual trades. This is the risk that the trader has to enter and there is no way around the risk in the highly volatile options market.
Distribute with Care
As a trader, especially a beginner, pay attention not to place all of your deposit money into one trade. That could be highly risky and is not recommended. Binary options trading consists of sequences of trades, and you minimize your risks by placing multiple trades, e.g. even if some of your trades are losing trades, you can still hope that the other ones will be winning trades which will bring back some of your invested money. Binary options trading is a complex process and should be regarded as a whole and not judged by single trades.
Pay Less Attention to the Minimum Deposit and More to your Goal
Instead of blindly focusing on the minimum deposit amount, binary options traders should shift their focus to how much money they need to invest in order to reach their profit target. If your plan is to earn 4-digit sums every month, you need to be aware that you have to deposit 4-digit amounts. Keep your expectations real and in line with your trading budget if you want do not want to get disappointed.