Binary options trading attracts many people by its apparent simplicity. The fastest, Turbo options with expiration time of 60 seconds are attractive for the following reasons:
- already in 60-120 seconds, the trader will know whether he made a good bet or made a mistake;
- trade is just one click – you need to buy a call option for a rise or fall;
- no need to spend time at the computer for days analyzing the markets and placing orders and stop losses;
- high yield (70-95% depending on the conditions of the broker);
- ability to open a large number of transactions, which increases the chances of winning.
However, short term binary options trading only at first glance seems built on “guessing”. For those who want to trade binary option 60 seconds based on luck, recall that the probability still exists and your 85% payout will have 100% of loss.
Short term binary options trading
Advice: not having sufficient level of skills and knowledge, don’t even try to trade quick options! The shorter the expiry time the higher the risks, because even easy information noise is able to instantly change the course of quotes, which in the medium term will return to its previous corridor.
1. Strategies, which are based on technical analysis.
On the basis of implementation it is similar with the Forex trading called “scalping”. The most popular are the trend strategies. Analysis of the time interval allows you to draw shapes of price trend, then the conclusion is made about how the price will behave in the first minutes of the next hour, by analogy with the previous variations. Recommended expiry times 1 minute, 5 minutes, 15 minutes. The time input is determined by technical indicators.
2. Strategies that are built on fundamental analysis.
Economic calendar determines the date of release of this or that news. Publication of the report, any forecast is able to stir up the stock market. Most often experienced traders choose a trading asset which is the greatest respond to fundamental information, wait a few seconds to see how the market will react and then buy the option. With the correct interpretation of the news and rapid response to short term trading with binary options can generate a good income. However, news of the surge can be quick. By the way, a lot of strategies are also built on the return of the price trend after a news shock in the familiar corridor.
3. Financial betting
Strategy has nothing to do with technical or fundamental analysis and it involves a mathematical calculation, what is the probability that a bet on the growth would have been profitable under certain conditions. A striking example is the martingale strategy according to which after a bad bet the doubling is necessary. According to the theory of the probability the doubling has to be successful, that the payment of 80% will allow to recoup the previous failure.
Examples of short-term binary options strategies:
- “Head and shoulders”. If the trend, for example in the growth stage is the support line (“neck”) and forms first a shoulder, then reaches its maximum, and then, forming the second “shoulder” is going down at the moment of breakthrough of the support line, you can open the option to sell;
- “Pinocchio.” Reversal model of technical analysis based on the fact that high peak means a drop in the short term, and Vice versa. If you see an unreasonable quick surge in trend (rising prices), then buy a 5 minute call option on the price drop;
- “Triangle”. Figure of technical analysis, which determines the level of price resistance. As soon as this level breaks, it makes sense to buy an option to increase;
- “Against the trend”. The strategy is based on the fact that the trend may not be permanent. And if now it is going to rise up, it will also go down in waves. Analysis of past fluctuations allows to determine the amplitude and frequency of vibrations and open trend opposite to the price of the option, knowing where the quotes will be via a fixed time. Apply on calm markets when there is no effect of news factor.
There are only few dozens of short-term binary options strategies. The difference between them is that they are applicable for certain types of assets with different levels of liquidity for the individual markets. Often a trader develops his personal strategy that is convenient to him personally
The rules of short-term binary options strategy:
- discipline. The amount (percentage) of the Deposit must be determined for one hour, a day (trading period of time);
- trade for the entire deposit is unacceptable;
- the selection of asset is held in advance and does not change in the course of trade;
- before the purchase of the option, it is necessary to analyze the economic calendar. News factor can disrupt the strategy of technical analysis;
- trade must be conducted on signals, in order to neutralize the error of entering the market on false trend.
I hope you have learned something useful from this general overview. Short term binary options strategy is able to generate income only if trade is done carefully on the basis of trading signals.