November 7, 2014
Q: How often do you recommend withdrawing money from brokers?
I prefer to do so once a week when I’m actively trading. I don’t leave anything in a broker’s account during a period when I’m rarely trading (like now). Even if you don’t earn any profit that particular week, I do feel it’s beneficial to withdraw regularly. Unfortunately, some brokers do charge you for withdrawing more than once per calendar month (or some specified time period), and may charge something like $30 per non-free withdrawal.
They often do offer the chance to waive the additional withdrawal fees if you upgrade to a higher level account. But this requires pretty large deposit sums so it’s really not doable for too many traders. Getting into the top-tier requires deposits of $/€/£5,000 or $/€/£10,000, which is a ton of money that few people have or want to put into trading as retail traders on offshore sites.
It is really up to you. But my feelings on the matter is that you can never be too safe when it comes to investing your money in these brokers. If for whatever reason your account is emptied, they go out of business unexpectedly, or they are late in processing a withdrawal, it might be a tough process to actually get your money. Just understand that it can be a big liability to leave sums of money in any given account that you can’t afford to lose. You need to have a good amount of trust in the broker you’re trading with, and this is why it’s imperative to read and ask around about various brokers and which ones people are having success with, and ultimately try one out on your own.
That said, I’ve never had an issue in my binary options career (about three years old now, although I haven’t been able to trade continuously). But I still like to be safe by withdrawing money regularly even if it means paying a little bit extra. I mean you do hate to spend the additional fees per month on basically nothing, but going a month without access to the money you deposited is a long time and I think most people wouldn’t feel comfortable doing that.
I also never recommend putting more into your account than necessary. A lot of brokers have $200 minimum deposits, and if you don’t trade amounts higher than that, then I wouldn’t suggest putting more in your account.
Sometimes with money management recommendations, you’ll see “never invest more than 1% of your account balance into any given trade.” For some forms of trading, like forex, that may be relevant. But for binary options, when your risk is limited to only your investment amount in that particular option, I revise that to say, “never invest more than 1% of the money you can afford to lose to trading.”
Hence, if you can afford to lose $500 or $1,000 or whatever it may be, I never recommend putting that much money into your account. Just keep it at the bare minimum of what you need to make one individual trade, if possible. If you don’t start out very well and deplete the smaller amount of funds you deposited, you can always re-deposit and not necessarily call it “wiping out your account” since you were simply going with whatever you needed to trade with. “Wiping out an account” usually connotes poor, emotional trading decisions that you led you to lose an amount that you probably shouldn’t have or couldn’t afford to lose.
So just keep it small and don’t put yourself in a situation where you set yourself up for the possibility of losing money that you really can’t afford to lose in the event the very worst-case scenario happens and you’re locked out of your money.
If you ever have your own questions about anything, please don’t hesitate to contact me by making a comment below this article or through a personal message on the site.