Limitations of risk management
Unlike Forex where traders can get accounts that allow them to trade mini- and micro-lots in small account sizes, many binary options brokers set a trading floor; The minimum amount that a trader can trade in the market.
This makes it easy to lose too much capital while trading binary. As an example, a forex broker may allow you to open an account with $200 and trade micro-lots, allowing a trader to expose only acceptable amounts of his capital to the market.
However, you will be hard pressed to find many binary brokers that allow you to trade for under $50, even with a $200 account. Four losing trades in this scenario will blow the account.
Cost of losing business
Unlike other markets where the risk/reward ratio can be controlled and set to give an edge to winning trades, binary options odds tilt the risk-reward ratio in favor of losing trades.
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