Trading 60 second binary options is risky, but it remains one of the more sought after features by traders. If you’re going to trade these fast moving options, then it is important to take steps to reduce volatility and manage your risk.
Typically, ultra short term options should only be approached by advanced of traders. We also recommend this, but to help you get to this point faster in your trading career, we’ve put together one of the most effective strategies we have found yet for trading these.
One 60 second trade alone is a 50/50 shot. Even with strong analysis, the odds are barely on your side, and the discounted rate of return that most brokers offer on these is going to ensure that you lose money over the long run when you’re trading these. And because 60 second trades move so fast, you can take out dozens of them per trading day. When you are on a losing path, more trades only will speed up the process. That’s exactly what you don’t want to happen.
However, ultra short binary options are beatable, but you need to approach them right. A series of trades helps you to accomplish this. Instead of one standalone trade at a time, you take out a rapid fire success of identical positions on the same asset, roughly 10 to 15 seconds apart from each other. This should be a minimum of three trades, and four if deemed necessary.
The object of this strategy is to overcome the variance that is created by a single one minute trade. This is a very short period of time, and even the most well researched trades can easily be wrong. Having more than one trade helps to nullify this, but not completely. It’s just a step toward a more predictable outcome.
Remember to make sure that you are analyzing each trade opportunity individually with a strict regimen of technical analysis. You cannot ever enter a trade like this without having thoroughly research the opportunity and determined if it has a strong chance of success. It can be compelling to take out trade after trade without researching, but this is going to lead to a loss for you. Before each series, you should be confident that you have done all that you can to ensure that one trade alone would be enough. The series that you are taking out is just to help you reduce the variance that will accompany one trade at such a short expiry.
Things to Look Out For
Because of the math behind binary options returns, you need to be successful on a majority of trades in a series in order to be profitable. If you make three trades, you will need to have two of them be correct in order to have turned a profit per series. If you have four trades, you need to have had three be correct. This means that you need to be very confident before you ever enter a position.
Also, sticking to a series once you’ve made your first trade can be tempting, but there are instances when you should abandon a series before you reach the conclusion. For example, if you’ve started a series, and then after the first trade an alert pops up on your computer to let you know that some news event is causing prices to go against you, then you should abandon the trade. The technical analysis that you did prior to beginning the series is no longer helpful. This should only happen in rare cases because of the short term nature of 60 second binary options.