If you want to trade binary options, you will need a high winrate. Achieving a high winrate of 82% is really remarkable. Watch the video below that explains how to get a high winrate like 82% with binary options!
https://www.youtube.com/watch?v=xZwwSnMUNyk
As said above it is very important that you achieve a high winrate with binary options if you don’t want to lose money. Let us make this clear with a simple example. Suppose your broker is offering 70% return. So if you win a $10 trade, you make $17. Suppose you have $1000 in your account. You win a trade. You make $17.5 and your account grows to $1007. But now let’s suppose you lose the next trade. You lose $10. Now your account balance is $997 and you are back to square one. Even winning one trade didn’t help you. With just one losing trade you have lost more than you had made. See in the first trade you made $7 in the first trade. In the next trade you lost $10. So you lost net $3. What this means is that you need 2 winning trades to recover from a losing trade. When you win 2 trades, you make $14. This means you recovered $10 that you lost.
This is how binary options brokers make money. They know it is very difficult for ordinary traders to achieve a high winrate. This is why the brokers give returns like 70-80% and never 100%. It is a simple fact. Now matter how good you are. You can never achieve 100% winrate in the long run. A losing trade will hurt more than a winning trade. In an effort to recover the loss you will lose again. So this will start a downward spiral that will result in a big drawdown to your account. You need to have strict risk management rules. If you lose 2 trades in a row you should stop trading for that day. It is as simple as that. Many traders blow out their account trying to recover the loss suffered from one trade.
With a return like 70%, you need a winrate at least above 70% to breakeven. Do the calculations and you will understand. Suppose you have an average winrate of 70%. This means that if you make ten $10 trades and you win 7 of them and you lose 3 of them. You lose $30 and you make $119. So you just make net $89. In short you lost $11.
Now suppose your winrate is 80%. The return offered by the broker is same 70%. In this case in ten trades, you win 8 trades and lose 2 trades. So if the trade size is $10, you lose $20 and you make $136. So you make net $116. Your profit is $16. You can see you need a winrate of at least 75% if you want to breakeven.