The 7-3-2 strategy in binary options is a money management approach, not a trading signal system. It’s designed to help traders control risk and preserve capital while still giving room for potential profits. Here’s how it works:
Breakdown of the 7-3-2 Strategy
- 7 trades: Out of every 10 trades you place, the goal is to win 7.
- 3 losses: Accept that around 3 trades may be losses.
- 2% risk per trade: You only risk 2% of your total account balance on each trade.
Why It’s Used
- Binary options are risky — payouts usually range between 60–90%.
- If you win 7 trades and lose 3 with proper risk control, you can still come out ahead.
- Example with $1,000 balance:
- Risk = 2% = $20 per trade.
- Win 7 trades (with 80% payout) → $20 × 0.8 × 7 = $112 profit.
- Lose 3 trades → $20 × 3 = $60 loss.
- Net = $112 – $60 = $52 gain per 10 trades.
Key Principles
- Discipline – Stick to the 2% rule, don’t increase trade size after wins or losses.
- Consistency – The edge relies on maintaining a high win rate (close to 70%).
- Risk Management – Prevents your account from being wiped out by bad streaks.