Even a high tech hedge fund running a high frequency trading algorithm is open to the risk of flash crashes or technology errors disrupting their trading. See the story behind the line of code that almost took down the largest US market maker, Knight Capital.
Binary Options Brokers That Offer Risk Free Trades
|+ 1 RISK FREE TRADE
|+ 3 PROTECTED TRADES
For small to medium retail traders, your typical day trader, there finally is actually a risk free trade proposition. Tradorax is letting anyone who funds a binary options account have 2 risk free trades! That means even if you lose, your account will not be negatively impacted. It will be as if the trade never happened.
For an example of how much this can help you, think of a trader who places 4 trades. Now, some traders are better than others, but overall, about 50% of trades will be winners, and 50% will be losers. This means that from 4 trades, a trader who meets the averages can expect to be correct on 2 of them, and lose on the other 2.
This would result in an overall loss for the trader in his account if all trades are the same size.
Now imagine that the same trader has 2 winning trades, and 2 risk free trades that do not lose any money. If each trade returns 80%, The trader will return an astounding 160% on his 2 winning trades, if all trades use the same amount of capital.
He will not lose any money on the incorrect trades, and from 4 trades the trader has made a higher return in a short period of time than most pros make in a year! Even if a trader only makes 4 trades and withdraws all his money, he can net a nice profit.
Risk free trading sounds too good to be true, but 24option and BancDeBinary have made it a reality. Why would they basically give money away? The first reason is they know only about 50% of the trades will be losers. A trader has to choose the trade as his risk free trade before he initiates the order.
So even if the trader has a winning trade, he will still use one of his risk free trades. This still is a huge advantage to traders though. Some traders will end up losing on both of their risk free trades, and the savings will be immense.
The second reason they do this is because it is a great promotion. They know that traders will not usually stop after the two free trades, and that they have an opportunity to generate profits in the long run. The onus is on the traders to be smart and take their profits while they are still on the table.
So while risk free trading has until now been a bit of a myth, Tradorax has created a great new opportunity for new accounts with their brokerage. If you want to take advantage of this offer while they are running the promotion, you must open and fund your account with their low minimum deposit. Remember it always pays to be smart.
How Risk-Free Trades Can Reduce Risk at Critical Moments
Risk-free trades can be a helpful tool to reduce the risk of losing funds to zero at critical moments.
When faced with a trade that has the potential for significant losses using a risk-free trade can provide a safety net.
By activating a risk-free trade and choosing the trade amount needed traders can protect their investments in case of an incorrect forecast.
This compensation mechanism allows traders to trade with real money without risking anything providing them with an opportunity to save money in risky trades.
However it is important to remember that risk-free trades should not be relied upon as the sole strategy for success in trading.
They should be used as an additional tool to mitigate risk and enhance trading performance.