Trading the 60 Second Binary Options
60 Second binary options expiries offer a sort of an adrenaline rush alongside the potential to make (or lose) a quick buck. Most binary options brokers today offer 60 second expiries as they have grown in popularity and for a reason.
Unlike scalping in forex, where profits are closed after a couple of pips, the profits you can make depend on factors such as leverage, account equity, spreads and liquidity. In binary options, 60 second expiry prove to be of a better advantage due to the fact that the restricting factors in forex are virtually absent. For a $200 deposit, traders can trade the 60 second binary options expiries without having to focus on factors that come into play while scalping forex.
What is the 60 Second Binary Options Expiries?
As the name suggests, these are binary options contracts (usually high/low binary options) that have an expiry time of 60 seconds (1 minute). The trader can choose to place a CALL or a PUT option and the minimum investment amount usually starts from $25 onwards on average.
Similar to regular binary options, 60 second expiries give you a fixed percentage if your contract expires in the money. However, the percentage payout is not as high compared to other binary options such as Touch, for example.
How to trade the 60 second binary options?
For starters, placing CALL and PUTS without knowing what the markets are going to do would be disastrous for the trader. Traders should make use of a charting software in order to understand price action in order to increase their probability of making profits from 60 second binary options.
Overall, traders need to pay attention to the following:
Instrument Liquidity: If the instrument that you are trading is ranging, then it can easily result in your binary options contract closing out of the money. The more liquid an instrument is, better the chances of your trading closing in the money. As such, focus on the most liquid pairs such as EURUSD, GBPUSD, USDJPY.
Trading News Events: Perhaps no other economic event can push prices as much as news events do. However, make sure to choose the news events you trade carefully. While there are many events, ranging from the obscure, trade balance data to the more eagerly watched Monetary Policy minutes or GDP estimates.
In a nutshell, when the actual data is released and if it falls below expectations, it usually results in a sell-off of the currency. Therefore, pay attention to the economic calendar which usually has a forecast or estimates. Make sure to trade in or around the news event. 60 seconds is ideally a great time to trade these events without concerns of slippage or widening spreads.
Technical Trades: Technical trades are a bit more complex than trading news events, where in you would require to do a technical analysis on the M1 charts to ascertain price action. While this is a good idea, make sure that you have your basics covered in technical analysis. Pay attention to the intra-day key technical levels such as support/resistance, pivot points, Fib levels and so on.
Risks involved with 60 Second Binary Options
Due to the nature of the binary option contract expiries, traders should note that there is a risk involved in trading these very short term binary options contracts. Ensure that your risk management is strong, which means do not risk too much of your capital too quickly, no matter how tempting it might seem. Make sure to research into the technical aspects and also pay attention to the fundamental news events in order to understand possible price moves. Do not make the mistake of trying to ‘figure’ out the possible outcome of the news events. The markets can surprise you many a times, thus it is prudent that the trader waits until the news is released in order to place a PUT or a CALL.