This is a best strategy to limit losses. The approach is also simple, making it a good option for beginners. Binary options traders limit the capital they invest in each trade to a percentage of their total account balance, for example, 1%. Experienced traders might go up to 5%, but the proportion is always small.

example: if you have $1,000 in your account and want to open a UP or Down binary contract, you would only invest 1% of your balance, i.e. $10. Similarly, if you took the 5% , your maximum position size would be $50.

Here are the reason to do that

You won’t lose all of your trading capital even in case of loss.
It eliminates the need for guessing when determining transaction size
It reduces greed and fear, allowing you to concentrate on market signals and research
The size of your transaction will expand or decrease in proportion to the size of your account