Use Options Or Binaries? Don't Forget About Risk Management

Risk tolerance is different for every trader. 

How much are you willing to risk on the trade?
Always start with the question of how much you are willing to risk on the trade. When this question can be answered, it can be amazing because one may get really tight trades of five to ten ticks enabling them to do four or five contracts for the same amount of risk.

Handling winning trades
Most traders are not good at handling winning trades. They cut their profits short because they are so happy finally to see a win. They get out when they profit $200 because it is so much more pleasurable to take profit and feel good about it.

Go for the middle third
Dr. Alexander Elder taught that the best traders are trying to get the middle third on a trend. If you can get the middle third of a trend on a consistent basis, you can be a very wealthy trader. The image below shows a down trending market.

This downtrend started at approximately 17630 and ran down to 17496.

Too much risk?
Start out with a defined stop and let that calculate the amount of your risk. If that is too much risk, then one can trade a smaller contract such as mini oil instead of oil or a Nadex oil spread, which is $1 per tick.

Find the necessary discipline
All traders have to find the discipline necessary to overrule emotional deficiencies. They have to find very objective methods for trailing stops. Follow rules and not emotions -- that's the key.