If you are a beginner trader looking for short-term techniques, pay attention to 60-second binary option trading strategies. In this article, we will tell you how they work, who should use them and who should not, as well as the pros and cons of 60-second trading.
What is 60-second trading?
A binary option is a financial product that depends on the outcome of the offer “Yes / No”, which is why it is called so. Investors and traders make a profit if the binary option expires in the money and lose if it expires out of the money.
60-second binary options are great for active traders who can open up to several hundred trades per day. They allow not only to profit from strong market moves but also to quickly exit a trade before a significant reversal occurs.
The 60-second strategy is the method of binary options trading that only takes 1 minute.
How does the 60-second trading strategy work?
Binary options have an expiration time (in this case, it is 60 seconds). When it expires, the price of the selected asset must be on the right side of the strike price.
An example of a binary option is deciding whether the asset price (e.g., stock) will exceed $30 in 1 minute. You need to answer: Yes (it will be higher) or No (it will be lower). In the first case, you need to buy a call option; in the second – a put option. If the forecast is correct, you automatically make a profit. Otherwise, you lose the funds invested in the trade.
Best 60-second trading strategy
In the binary options market, such as Forex, there is no 100% winning trading strategy, including for 60-second timeframes. To get the most accurate trading signals, you must be able to use support and resistance levels (these are the frames in which the asset price moves).
One of the main principles of trading binary options: the smaller the timeframe, the more likely the asset price will go beyond it. However, this does not exclude the risk of losing investments because sooner or later, the price returns to the levels (this rule is also relevant for long-term trading).
60-second binary options with indicators
Let’s take a closer look at what indicators to use in 60-second trades to capitalize on the binary options market.
Relative Strength Index (RSI)
The relative strength index or RSI is a momentum indicator used in technical analysis. It calculates the relationship between price and time. RSI determines if an asset is overbought or oversold by comparing the size of recent gains to losses based on the average of up and down close days. It can also indicate assets ready for a corrective pullback in price or a trend reversal.
If the chart crosses the RSI line below the overbought line, this is a buy signal. Crossing above the oversold line is a sell signal.
RSI is not as reliable in trending markets as in trading ranges. It is essential to consider that its signals are often false in a strong uptrend or downtrend.
Ichimoku combines technical indicators that show support and resistance levels, trend direction, and momentum. It is represented by five lines, two forming a cloud, a key part of the indicator that forecasts potential future areas of support and resistance.
When the price is below the cloud, the trend is considered to be down. When the price is above the cloud, there is an uptrend.
The signals described above are confirmed if the Ichimoku cloud moves in the same direction as the asset price. For instance, during an uptrend, the cloud top moves up, and during a downtrend, its lower part goes down.
It is one of the graphical indicators for technical analysis, which is widely known in many markets, including futures and stocks. Bollinger Bands is used to track the trend and determine entry and exit points for a trade.
The main approach to using Bollinger Bands is determining whether the market is overbought or oversold. When an asset breaks below the lower band of the indicator, it means that prices have dropped too much and are highly likely to jump. When the price breaks the upper Bollinger band, the market is overbought, and a pullback is expected.
Note! Before entering 60-second binary options trading, test several indicators on a demo account to choose the most effective one.
Who should implement the 60-second binary options strategy?
We recommend that you consider any strategy only as a learning tool that will help you develop your own approaches to trading over time. There is no technique that is equally suitable for all situations. However, it is worth trying the 60-second binary options strategy in your trading in some cases.
You are an active trader
If you are one of those who lack the patience for long-term trades, 60-second trading binary options may be the best way. It is intended for active traders who want to make a profit quickly and are ready to open up to several hundred trades in one day.
You have an experience in highly volatile assets
Some assets, such as cryptocurrencies, are very volatile. If you have no difficulty identifying trends, you will most likely quickly learn how to profit from the 60-second trading strategy.
You have already profited from small market movements
Some traders can make correct forecasts when market moves are high. If you are one of them, then the 60-second trading strategy will probably suit you.
You know how to control your emotions
Apply the 60-second strategy only if you can restrain emotions when making trades. Self-control can significantly reduce the risk of losing investment.
Who should avoid the 60-second trading strategy?
Take your time to apply the 60-second trading strategy on the binary options market if you belong to one of the following categories.
You are new to the market
If you have never traded before, very short timeframes are not the best choice. To reduce risks, starting with an interval of at least 15 minutes is recommended.
You are used to long-term trades
If you are used to making profits from a small number of trades, or even from one, the 60-second strategy may disappoint you. The profit from one trade is insignificant, but one significant loss can negate the gain from many.
You depend on signals
Signals are not always accurate in such a short timeframe due to the high market unpredictability.
Advantages of the 60-second trading strategy
When used correctly, the trading mechanic has the following benefits:
- You can earn extra income from even the smallest price changes that occur in 1 minute.
- Such a short expiration period allows you to make up to 40-50 profitable trades within one hour, while with a 30-minute expiration, only 5-10 trades become successful (on average).
- To correctly forecast how the price will change over the next 60 seconds, it is not necessary to look at charts for the whole day. Analysis of the last hour is enough to determine the trend and follow the signals.
- Today, almost every broker provides software for trading 60-second binary options. Therefore, you can choose a platform with maximum benefits, such as unique assets or commission-free trading.
When 60-second trading binary options, it is not recommended to use other people’s signals, especially on live trades.
Disadvantages of the 60-second trading strategy
60-second trading is considered riskier than binary options trading with a longer timeframe. “Overtrading” is common among beginners who want to catch every market move without realizing that not all of these trades can become profitable.
Profit from 60-second binary options is about 60%, which is significantly lower than from more traditional types. Therefore, you must achieve a very high percentage of successful trades (at least 6 out of 10).
The 60-second trading strategy is one of the best ways to profit. However, you must constantly learn and practice to reduce the risk of losing your investment. When opening 60-second trades on the binary options market, do not trust trading signals, but study the live market news and train on a demo account. Free tutorials, such as 60-second binary options trading: Mastering binary ALPHA: Recape – Part -1 and the PDF booklet, will also help you master the strategy.