60 second binary option strategy

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Introduction to 60 Second Binary Options

60 second binary options are the shortest expiry time available in the binary options market. They offer the potential for rapid profits, but also carry a significantly higher degree of risk. This article will provide a comprehensive guide to trading 60 second options, covering the strategy, risk management, and technical analysis techniques that can increase your chances of success. It’s crucial to understand that while potentially lucrative, 60-second options are *not* suitable for beginners without a solid understanding of the underlying markets and risk tolerance. This strategy relies on extremely short-term price movements, requiring quick decision-making and precise execution.

Understanding the Mechanics

Before diving into strategies, let's solidify the core mechanics of a 60 second binary option. You are essentially predicting whether the price of an asset (like a currency pair, stock, or commodity) will be higher or lower than the current price at the expiry time – 60 seconds from the moment you open the trade.

  • Payouts: Payouts typically range from 50% to 80%, meaning if you invest $100 and predict correctly, you receive back $150-$180 (your initial investment plus the profit).
  • Risk: The risk is binary – you either receive the payout or lose your entire investment. There’s no partial return.
  • Underlying Assets: A wide range of assets can be traded, including major currency pairs like EUR/USD, stocks like Apple (Stock Trading), commodities like gold, and indices like the S&P 500.
  • Call/Put Options: You choose between a “Call” option (predicting the price will *rise* above the strike price) or a “Put” option (predicting the price will *fall* below the strike price).
  • Strike Price: The strike price is the price the asset must be above (Call) or below (Put) at expiry for your trade to be "in the money".

Why Trade 60 Second Options?

The primary appeal of 60 second options is the speed. Traders can open and close multiple trades within minutes, potentially compounding profits quickly. This also means quick losses are possible, emphasizing the importance of strict risk management.

  • Fast Results: Immediate feedback on trading decisions.
  • High Frequency Trading: Allows for a high volume of trades.
  • Potential for Rapid Profits: Although risky, the short timeframe can lead to substantial gains.
  • Simple to Understand: The concept is straightforward: predict price direction in 60 seconds.

The Core 60 Second Binary Options Strategy: Trend Following with Candlestick Patterns

The most reliable strategy for 60 second options focuses on identifying *strong* short-term trends and confirming them with candlestick patterns. This is not about predicting the future; it’s about capitalizing on immediate momentum.

1. Select an Asset: Choose a volatile asset. Currency pairs like EUR/USD, GBP/USD, or USD/JPY are common choices, especially during major trading sessions (London and New York). Check the Volatility Index for potential assets. 2. Timeframe: Use a 1-minute or 2-minute chart. Shorter timeframes are essential. 3. Identify the Trend: Determine the prevailing trend. Look for a clear upward (bullish) or downward (bearish) direction. Simple Moving Averages (Moving Averages) can help. A 5-period or 10-period SMA can smooth out the noise and reveal the trend. 4. Candlestick Confirmation: This is *crucial*. Don’t trade based on trend alone. Look for specific candlestick patterns:

   *   Bullish Candlestick Patterns (Call Option):
       *   Hammer:  A small body with a long lower wick, indicating potential bullish reversal.
       *   Morning Star: A three-candlestick pattern signaling a potential trend reversal.
       *   Engulfing Pattern:  A bullish candlestick that completely engulfs the previous bearish candlestick.
   *   Bearish Candlestick Patterns (Put Option):
       *   Hanging Man: Similar to a hammer but appearing in an uptrend, suggesting a potential reversal.
       *   Evening Star: A three-candlestick pattern signaling a potential trend reversal.
       *   Engulfing Pattern: A bearish candlestick that completely engulfs the previous bullish candlestick.

5. Entry Point: Enter the trade *immediately* after the confirming candlestick pattern forms. Don't wait for confirmation on the next candle – 60 seconds isn’t enough time. 6. Expiry: Set the expiry time to 60 seconds. 7. Risk Management: Invest only a small percentage of your trading capital (1-2%) per trade. This is paramount.

60 Second Strategy Summary
Action |
Select a volatile asset |
Use a 1- or 2-minute chart |
Identify the prevailing trend |
Confirm with candlestick patterns |
Enter trade immediately |
Set expiry to 60 seconds |
Manage risk (1-2% capital) |

Advanced Techniques and Considerations

  • Bollinger Bands: Use Bollinger Bands to identify potential overbought or oversold conditions. A price touching the upper band might suggest a potential Put option, while a price touching the lower band might suggest a Call option. Exercise caution, as these are only signals, not guarantees.
  • Relative Strength Index (RSI): The RSI can confirm momentum. An RSI above 70 suggests overbought conditions (potential Put), while an RSI below 30 suggests oversold conditions (potential Call).
  • News Events: Avoid trading during major news releases. Volatility spikes can cause unpredictable price swings, making 60 second options extremely risky. Refer to an Economic Calendar.
  • Trading Sessions: The London and New York trading sessions generally offer higher volatility and more trading opportunities.
  • Broker Platform: Choose a reputable binary options broker with a fast and reliable platform. Latency can be devastating in 60 second trading.
  • Practice Account: *Always* practice with a demo account before trading with real money. This allows you to refine your strategy and get comfortable with the speed of 60 second options.
  • Volume Analysis: Look for increasing volume confirming the trend and candlestick patterns. Higher volume suggests stronger conviction behind the price movement. See Volume Analysis.

Risk Management is Paramount

60 second binary options are inherently risky. Effective risk management is the key to survival.

  • Small Investment: Never invest more than 1-2% of your total trading capital in a single trade.
  • Emotional Control: Avoid revenge trading or chasing losses. Stick to your strategy and risk management rules.
  • Stop Loss (Conceptual): While you can't set a traditional stop loss in a binary option, mentally define a maximum number of consecutive losses you're willing to accept before pausing trading.
  • Diversification (Limited): Diversification is less effective with 60 second options due to the short timeframe, but consider trading different assets to spread risk.
  • Realistic Expectations: Don’t expect to get rich quick. Consistent, small profits are more realistic than large, infrequent wins.


Common Mistakes to Avoid

  • Trading Against the Trend: This is a recipe for disaster. Always trade in the direction of the prevailing trend.
  • Ignoring Candlestick Patterns: Candlestick patterns provide crucial confirmation. Don't trade without them.
  • Overtrading: Don't open trades just for the sake of trading. Wait for high-probability setups.
  • Emotional Trading: Let your strategy guide your decisions, not your emotions.
  • Insufficient Practice: Don't trade with real money until you’ve consistently profited with a demo account.
  • Neglecting News Events: Trading during news releases is extremely risky.
  • Using High Leverage (Not Applicable but a General Warning): While not directly leveraged, the binary nature creates a similar effect – a total loss of capital.

Comparison to Other Binary Options Strategies

| Strategy | Timeframe | Risk Level | Complexity | |---|---|---|---| | 60 Second | 60 Seconds | Very High | Low-Medium | | High/Low Options | Minutes to Hours | Medium | Low | | Touch/No Touch Options | Minutes to Days | High | Medium | | Range Options | Minutes to Days | Medium-High | Medium | | Ladder Options | Minutes to Hours | High | Medium-High |

Resources for Further Learning

  • Babypips.com – A comprehensive resource for Forex and trading education.
  • Investopedia – Definitions and explanations of financial terms.
  • TradingView – Charting and analysis tools.
  • Binary Options University – Educational resources specifically for binary options trading (exercise caution and verify information).

Disclaimer

Trading binary options carries a high level of risk and is not suitable for all investors. You could lose all of your invested capital. This article is for educational purposes only and should not be considered financial advice. Always conduct your own research and consult with a qualified financial advisor before making any trading decisions. The author and publisher are not responsible for any losses incurred as a result of trading.



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⚠️ *Disclaimer: This analysis is provided for informational purposes only and does not constitute financial advice. It is recommended to conduct your own research before making investment decisions.* ⚠️

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