Turbo options

1. Turbo Options: A Beginner's Guide

Turbo options, also known as 60-second options, or sometimes binary options (although the term "binary options" is increasingly avoided due to historical regulatory issues - see Binary options fraud), are a fast-paced form of financial trading gaining popularity due to their simplicity and potential for quick returns. This article aims to provide a comprehensive guide for beginners, covering everything from the basics to strategies, risk management, and platforms. This guide assumes a basic understanding of financial markets, but will strive to explain concepts clearly.

What are Turbo Options?

At their core, turbo options are a prediction market. You predict whether the price of an underlying asset (like a stock, currency pair, commodity, or index) will be *above* or *below* a certain price (the strike price) at a specific time in the future – typically 60 seconds, but durations can range from 30 seconds to several minutes. If your prediction is correct, you receive a predetermined payout. If it's incorrect, you lose your investment.

The key difference between turbo options and traditional options (like Call options and Put options) lies in the simplified payoff structure and the very short timeframes involved. Traditional options offer more complex payoff profiles and are generally held for longer periods. Turbo options are essentially a ‘yes’ or ‘no’ proposition.

• **Underlying Asset:** The asset you are trading (e.g., EUR/USD, Apple stock, Gold).
• **Strike Price:** The price level that determines whether your prediction is correct.
• **Expiration Time:** The time at which the option settles, and you receive your payout or loss (e.g., 60 seconds, 2 minutes).
• **Payout Percentage:** The percentage of your investment you receive if your prediction is correct. This is typically between 70% and 95%, but varies by platform and asset.
• **Investment Amount:** The amount of money you risk on each trade.

How do Turbo Options Work?

Let's illustrate with an example:

You believe the price of Gold (XAU/USD) will *increase* in the next 60 seconds.

1. **You choose "Call" (or "Up"):** This means you are predicting the price will go up. 2. **You select the Investment Amount:** Let's say you invest $10. 3. **The platform sets a Strike Price:** The current price of Gold is $2000. The platform automatically sets a strike price slightly above this, perhaps $2000.50. 4. **The 60-Second Timer Starts:** You have 60 seconds to see if your prediction comes true. 5. **Outcome:**

  * **If the price of Gold is *above* $2000.50 at the expiration time:**  You win! You receive a payout of $10 x payout percentage (e.g., $10 x 80% = $8).  Your net profit is $8 - $10 = -$2 (remember, you lose your initial investment regardless).  This is where the payout percentages are critical; they need to be high enough to offset the loss when you're wrong.
  * **If the price of Gold is *below* $2000.50 at the expiration time:** You lose your $10 investment.

Conversely, if you believe the price will *decrease*, you choose "Put" (or "Down").

Understanding Payouts and Profitability

The payout percentage is crucial for understanding the profitability of turbo options. A payout of 80% means you receive 80% of your investment back *in addition* to your original investment if you are correct. However, because you lose your entire investment when you are wrong, the percentage needed to become profitable is higher than it appears.

To break even, you need a win rate greater than:

`1 / (Payout Percentage / 100) `

For example, with an 80% payout, you need a win rate of greater than 1 / (80/100) = 1.25 or 125%. This is impossible! Therefore, turbo options *always* have a negative expected value from the broker's perspective. Successful trading relies on skill and strategy to overcome this inherent disadvantage. Risk of ruin is very real in this market.

Popular Turbo Options Strategies

Several strategies can be employed to increase your chances of success. However, remember that no strategy guarantees profits.

1. **Trend Following:** Identify an established trend (using tools like Moving averages, MACD, or Bollinger Bands) and trade in the direction of the trend. If the price is consistently rising, buy "Call" options. If it's falling, buy "Put" options. Technical analysis is essential here. 2. **Range Trading:** Identify a range within which the price is fluctuating. Buy "Call" options when the price is near the bottom of the range and "Put" options when the price is near the top. Support and resistance levels are crucial for this strategy. 3. **News Trading:** Capitalize on the volatility created by major economic news releases (e.g., interest rate decisions, employment reports). Be very careful with this strategy, as prices can move unpredictably. Economic calendar is your friend. 4. **Martingale Strategy (Highly Risky!):** Double your investment after each loss, with the goal of recovering all previous losses with a single win. *This strategy is extremely dangerous and can quickly deplete your account.* It's generally advised against. Understanding compound interest will highlight the dangers. 5. **Anti-Martingale Strategy (Less Risky):** Double your investment after each win. This strategy aims to maximize profits during winning streaks but minimizes losses during losing streaks. 6. **Pin Bar Strategy:** Identify pin bar candlestick patterns, which can signal potential trend reversals. Candlestick patterns are a core skill for technical traders. 7. **Bollinger Band Squeeze:** When the Bollinger Bands are narrow, it suggests low volatility. A breakout from the squeeze can signal a strong price move in either direction. Bollinger Bands are a popular volatility indicator. 8. **Moving Average Crossover:** When a short-term moving average crosses a long-term moving average, it can signal a potential trend change. Moving average crossover is a classic trading signal. 9. **Fibonacci Retracement:** Use Fibonacci retracement levels to identify potential support and resistance levels. Fibonacci retracement is a tool for identifying potential turning points. 10. **Ichimoku Cloud:** Use the Ichimoku Cloud indicator to identify potential support and resistance levels, as well as trend direction. Ichimoku Cloud is a comprehensive technical indicator.

Risk Management is Paramount

Turbo options are inherently risky. Here's how to manage that risk:

• **Never invest more than you can afford to lose:** This is the golden rule of trading.
• **Start small:** Begin with small investment amounts to learn the ropes and test your strategies.
• **Use stop-loss orders (if available):** Some platforms offer the ability to set stop-loss orders, which automatically close your trade if the price moves against you.
• **Diversify your trades:** Don't put all your eggs in one basket. Spread your investments across different assets.
• **Avoid emotional trading:** Make rational decisions based on your strategy, not on fear or greed. Cognitive biases can significantly impact trading decisions.
• **Understand the payout percentage:** Factor the payout percentage into your risk-reward calculations.
• **Practice on a demo account:** Before risking real money, practice with a demo account to familiarize yourself with the platform and test your strategies. Demo accounts are invaluable learning tools.
• **Keep a trading journal:** Record your trades, including your reasons for entering and exiting, and analyze your performance to identify areas for improvement. Trading psychology is often overlooked.

Choosing a Turbo Options Platform

Several platforms offer turbo options trading. Consider the following factors when choosing a platform:

• **Regulation:** Ensure the platform is regulated by a reputable financial authority (e.g., CySEC, FCA). Financial regulation is vital for investor protection.
• **Payout Percentages:** Compare payout percentages across different platforms.
• **Asset Selection:** Choose a platform that offers a wide range of assets to trade.
• **User Interface:** Select a platform with a user-friendly interface that is easy to navigate.
• **Customer Support:** Ensure the platform offers responsive and helpful customer support.
• **Deposit and Withdrawal Options:** Check the available deposit and withdrawal methods.
• **Trading Tools and Features:** Look for platforms that offer useful trading tools, such as charting software and technical indicators.

Some popular platforms include:

• IQ Option ([1])
• Pocket Option ([2])
• Binary.com ([3])

• Always conduct thorough research before choosing a platform.* Beware of unregulated brokers and platforms with suspiciously high payout percentages.

Advanced Concepts

• **Volatility:** Understanding implied volatility and how it affects option prices is crucial for advanced traders.
• **Time Decay (Theta):** Turbo options experience rapid time decay, meaning their value decreases as the expiration time approaches.
• **Delta Hedging:** A more complex strategy used to neutralize the risk of price movements.
• **Correlation Trading:** Trading based on the relationship between different assets.
• **Algorithmic Trading:** Using automated trading systems to execute trades based on predefined rules.

Common Pitfalls to Avoid

• **Chasing Losses:** Trying to recover losses quickly by increasing your investment size.
• **Overtrading:** Making too many trades, often driven by emotion.
• **Ignoring Risk Management:** Failing to implement proper risk management strategies.
• **Believing in "Guaranteed" Strategies:** No strategy guarantees profits.
• **Trading Without a Plan:** Entering trades without a clear strategy or rationale.
• **Falling for Scams:** Be wary of unrealistic promises and get-rich-quick schemes.

Conclusion

Turbo options can be an exciting and potentially profitable form of trading, but they are also inherently risky. Success requires a solid understanding of the underlying principles, a well-defined strategy, and disciplined risk management. Beginners should start with a demo account, practice consistently, and never invest more than they can afford to lose. Continuous learning and adaptation are key to navigating the dynamic world of turbo options trading. Market microstructure can also play a role in short-term price movements.

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