Many people refer to binary options as gambling. Even though theres heavy risk involved in trading binary options, it’s nothing like gambling even if its similarities can easily be perceived as so. The truth of the matter is that options are asset trading instruments used for people who follow market trends. As an example, if you''re someone who followed the 2008 housing market crash, you might have foreseen that many companies, who offered mortgage backed securities like AIG, would have been drastically effected by the crash, and therefore trading options based on the price of AIG stock lowering would have enabled you to capitalize on that trend. Market predictions can however, end up incorrect resulting in a trader losing large amounts of capitol in a short period of time. That is why following a risk management strategy is very important when trading binary options. Here are some tips that can help you develop the right strategy for you