As the online trading environment continues to modernize, we are constantly seeing new innovations for the different ways traders can profit from the financial markets. One of the newest examples of this can be seen in 60 Second binary options, which offer a contract expiration period of one minute. Since their introduction, however, the 60 Second option has become widely popular, and a large variety of trading brokers now offer this trade to their clients.
Binary options offer all sorts of expiry times, from 5 minutes away to the end of the week or the end of the month. For those that want to be extremely active in the market though, there is the 60 second binary option. Since these options expire in one minute you can potentially do hundreds of trades a day. That means even with a small amount risked on each trade, you can make–or lose–a lot in one day.
60 Seconds Binary Option Explained
Like traditional binary options, if you believe an asset will be higher than the current price 60 seconds from now you’ll buy a call option. If believe an asset will be lower than the current price 60 seconds from now you’ll buy a put option. A correct assessment will land you a pre-determined payout, usually between 60 and 70% on the money you traded (plus you get the money you placed on your trade back). Choose wrong, and you lose amount you placed on the trade.
The 60 seconds starts the second you place the trade. So if you place a trade at 9:45:15 AM, your binary option expires at 9:46:15 AM, 60 seconds later.
Figure : 60 Second Binary Options
Factors to Consider When Trading
Before entering into these types of trades, it is important to consider a few factors. First, and possibly most important, is the need to have a strong familiarity with your binary options trading platform. It should be clear that you will not want to place your first-ever trade (and risk your hard earned money) on a platform that you have not tested.
After you are completely aware of how to open, close, and adjust your trades, you must next test the platform’s efficiency. Here, you are looking to make sure that your platform is capable of executing you trade at the exact time and price you are expecting. Without this, even the smallest price movements can start to become very costly and erode the balance of your trading account. It also important to make your test trades on a demo account so that no money is needlessly wasted.
The final areas of consideration come with the trading parameters themselves, which will form the basis of your trades. You will need to be aware of which asset you are looking to trade (for example, a stock, currency, commodity or index) and the expected price direction (either increasing or decreasing in value). From here, you can choose your price levels (strike prices) and your total trading sizes(the amount of money in your trading position. It is important to have all of these parameters thought out beforehand, as you will not have much time to change your positions with a 60 Seconds binary option.
Managing Risk in Fast Moving Markets
At this stage, the 60 Seconds options trade is one of the fastest ways to make profits in any trading system but this also means that it is possible to encounter losses just as quickly. Because of this, risk management becomes even more important. One positive aspect of these types of options is that you will be able to trade in increments of $10 for each trade at Banc De Binary, and this allows you to limit your risk in fast moving markets. As a general rule, it is not recommended to put more than 2% of your trading account into a position at any one time, and this is especially true when dealing with 60 Seconds options.
Advantages of 60 Seconds Binary Option
The main advantage is that you can essentially trade as much as you want. Theoretically you could make a trade every few seconds, or basically as fast as you can click your mouse. This allows you take advantage of any short-term opportunities you may see, without needing to worry about finding an expiry time that suits your timeframe. Simply click to buy a put or call and wait 60 seconds. Trade multiple assets and you could have multiple trades on at one time, all expiring within a very short timeframe.
From a trading perspective 60 second binary options allow you capitalize on strong market moves effectively. If the EUR/USD for example is having a very strong morning, while you still need to time your entry, chances are the EUR/USD is still going to be strong 60 seconds from now. Therefore, these options let you jump into the flow of the market, and get out of the trade quickly before a major reversal occurs. That said, you’ll still need skill in order to determine when strength may be waning, warning you it is time to back off.
This allows you to seize every possible opportunity, and potentially rack up some big daily gains.
Disadvantages of 60 Seconds Binary Option
While you can trade a lot in a day with 60 second binary options and potentially make a lot of money, you could also lose a lot. “Over-trading” is common among new traders who want to try to catch every market move, but these aren’t likely high probability trades to win. Good set-ups often take time to develop, and therefore by using 60 second binary options you may be distracted by mediocre or poor trade set-ups, missing the good ones.
The payouts on 60 second binary options is also generally lower than other more traditional types of binary options, in the 60% area. This means you will need to have a very high win rate when trading. If you lose 100% of the capital you trade on losers, and only make 67% (for example) on your winners, you need to win 6 out of 10 trades to breakeven (tiny profit in this case).
Do your Home work
60 second binary options provide a load of potential, and provide a way to seize short-term opportunities. Ideally, 60 second binary options should be used for just that–seizing high probability short-term opportunities. There is a big risk of over-trading these types of binary options since there is the possibility of instant gratification, or if you lose the potential for “revenge trading” where you try to recoup losses. This usually doesn’t end well. Lower payouts also signal that these options should be used sparingly. Over the long-run you need to win about 6 out of 10 trades to breakeven. To make a decent profit your win rate will need to be higher. That is difficult if you over-trade or trade mediocre set-ups. As with any trade, trade quality set-ups over quantity.
This kind of trading can be very rewarding to some people but new traders should recognize that they can also be more challenging and may pose a higher risk in some ways. It’s true that you can make a lot of money very fast on 60-second trades but you can also lose them more quickly as well. The trades are going very fast and even some experienced traders can’t manage to keep up with them or manage such small increments of time. That’s why new traders should start their training on slower trades and then work their way up to faster trades.
The 60 second binary trading can be very addictive because they go so quickly. Many people get caught up in the excitement and not realize how quickly are spending their money. You should always try to stay on top of what you are doing and keep an eye on your account balance. If you find end up in a situation where you’re losing more than you’re wining, it’s recommended to back off from the market, take a little break, figure out why you are losing, and then come back fresh.
If you manage to learn and master the 60 second binary trading, you have a big chance to earn a lot of money at lightning speeds.
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