One of the most frequent question most binary option traders are usually asking their brokers before actually making their first investment is what is the lowest possible deposit. Traders tend to think that if they have a low Binary Options Minimum Deposit the less the risk taking is.
It is logical that binary traders with less money to invest will pick a low deposit broker as they don’t have the money to make a bigger investment and if they could afford it they would probably invest in a larger deposit, as that has the advantage of being able to gain more trades and more trades means a better chance of making a profit.
If you can afford only a minimum deposit of $200 and you lose it all then you would have made a 100% loss. If someone can afford to make a bigger deposit of $10,000 and they lose it all then that too would be counted as a 100% loss. So whether you make a minimum deposit or a bigger deposit, your loss is calculated on percentage, just like gains.
Many Brokers advertise a Binary Options Minimum Deposit in order to attracts as many traders as possible but when a trader do choose to start with the minimum deposit; they do all they can to convince him to invest more. The reason is some brokers operates as markets makers, in other words, when you lose they profit. So first they try to attract traders with advertisements such as “Start with as low as $100”, and once a trader does invest $100, they tell him that with a bigger amount he will a way better service. For more information about how to track the best binary options brokers, Click Here
Of course you can look at it another way also. With a minimum deposit of $200 you will be able to make 10 trades. Suppose a broker takes a minimum deposit of just $20 and allows you to make 20 trades.
So if you are a beginner it is actually a good idea to learn the ropes with a Binary Options Minimum Deposit. However, if you have experience in binary trading then a larger deposit works better.
One other fact to keep in mind it that if you lose the minimum deposit you will have to make another deposit before you can trade again. With a larger deposit this might not be the case. With larger amounts you do not lose your money all at once but gradually and if you know how to trade you could make a bigger profit than one who has a low minimum deposit. A trader that is new to binary options trading must begin with a small as he could land up losing his entire large deposit.
For conclusion, Binary options has become popular because it requires very little initial deposit and minimum risk as compared to making a larger initial investment and then out of inexperience making damaging losses. So begin with low minimum deposits and gradually increase the deposit so you have sustained profit.
However, you must make an initial deposit with a binary broker only after you know the minimum trade size requirements of any particular broker.