60 SECOND TRADING STRATEGY (FOR BINARY OPTIONS)
The binary options (BO) market has been more vibrant than ever before. Unlike traditional investors, BO traders merely speculate on the future market trends of financial assets to earn fixed incomes provided the options are in the money at the predetermined time. Otherwise, they make nothing. This trait has worried traders and even governmental authorities about involved stakes. Therefore, proper trading strategies are essential to enter the market successfully. This post will detail one of those measures, the 60-second trading strategy.
The Definition of the 60-Second Binary Options Trading Strategy
Simply, the 60-second strategy for binary options entails multiple principles that support traders to make accurate predictions about upcoming market trends within 60 seconds. For example, if you enter the trade at 1:15:00 PM on January 1st, 2021, the expiry time of your binary option is at 1:16:00 PM on the same day.
Among available measures to trade binary options, the 60-second trading strategy has been preferred because it fulfills the binary options trader’s expectation of generating decent profits within a very squeezed time frame. Based on the one-minute chart, this short-term strategy is popularly employed to trade different investment products (e.g. currency pairs, share indices and cryptocurrencies).
However, numerous traders, especially the inexperienced, find it challenging to make profitable decisions in a too-short time. To improve the profit-to-loss ratio and the effectiveness of trading, therefore, traders should use assorted technical tools and indicators as well as observe major news to analyze price movements and recognize trading signals. Input parameters need repeatedly adjusting and backtesting in a demo account to ensure the good performance and profitability of the 60-second trading strategy.
How do 60-Second Binary Options Trading Strategy Work?
The idea to trade binary options within 60 seconds effectively is choosing either a CALL option if the price of the traded financial offering is forecasted to increase after 60 seconds, or a PUT option if you anticipate the asset’s value depreciating one minute since you placed a trade. Assuming you risk US$100 to buy a call option with a payout of 70%. When the odds are stacked in your favour, then your financial gain is US$70 (= US$100 x 70%). Otherwise, you lose a bet.
Pros and Cons
The major benefit of trading binary options in 60 seconds is definitely considerable incomes generated from multiple winning trades. Indeed, if you have a profitable strategy, develop trading proficiency and capitalize on strong price moves, your win rate will be heightened. You then may place as many trades as possible without worrying about finding suitable expiry times for options. When the profit-to-loss ratio is overwhelmingly positive, you will receive a fortune.
Nevertheless, the “high profit” scenario also tempts numerous novice speculators to overtrade 60-second binary options. In fact, the market records different trading patterns and movements at distinct points, which requires participants to periodically revise trade setups and modify parameters to reflect new moves. Therefore, not only may the continuous trading deplete their reserves, but it also burns out traders.
Best Indicators for the 60-Second Binary Options Trading Strategy
Trend indicators that are crucial to identify the direction of long-term market trends are not appropriate for the 60-second trading strategy.
Instead, any technical indicators that discover fast-changing momentum are highly recommended. For instance, such quick oscillators as Relative Strength Index (RSI), Williams %R, Fast Exponential Moving Averages or Stochastic oscillator are widely applied to ascertain immediate overbought and oversold market conditions. Those indicators concurrently help chart support and resistance ranges. Moving forward, traders then may buy either call options at support or put options at resistance levels.
Other approaches are effectively used to maximize the productivity of this 60-second trading strategy. Firstly, when you notice an upcoming strong movement on the one-hour chart induced by unprecedented news, you can promptly jump into the market and continually trade 60-second options until the trend changes its direction. Further, momentum indicators such as Parabolic Stop and Reverse (Parabolic SAR) or Average Directional Index (ADI) are powerful in terms of demonstrating the points when the asset’s value proceeds moving in the existing direction.
Finally, traders sometimes enter the sideways market, so it is difficult to make a decision of whether to buy options. In this case, you may use the multidirectional trading strategy (e.g. Protective Put) which allows you to simultaneously buy call and put options with the aim of protecting your account balance despite the price’s direction.
The perfect combination of technical instruments to use the 60-second trading strategy effectively takes time and effort. With the current support of legitimate brokers like FinmaxBO, you may learn about this strategy through coaching sessions with their binary options experts. What to do then is just discussing and asking personal analysts for help. They will help you refine and complete your strategy to get the most out of trades.