What are 60-Second Binary Options Trades?
The 60-second trade can be seen as the mirror image of the old-fashioned buy-and-hold strategy that was rightly popular from the end of World War Two until the 1970's.
Market volatility, world economic and military uncertainty, swiftly-growing emerging markets, and climate anomalies have made most investors short-term investors. В Short-term may still mean months or years but it no longer means one's lifetime.
60-second trades expire in 60 seconds! В That much is obvious. В How you can profit from a 60-second trade strategy is discussed here.
Many Trades
There are many traders who make one or just a few trades per day. В We are all so busy and with work, family, social obligations, plus market analysis that we have relatively little time to make more than a few trades per day.
The 60-second trader makes many trades per day. They may make hundreds of trades every day as long as the trades continue to be in keeping with their market strategy.
We talk about technical and fundamental analysis. В For our present purposes, fundamental analysis tells us the long-term trend for an asset. Fundamental analysis is not very useful to the 60-second options trader.
Technical analysis is essential to high-profit 60-second trading. The technical chart for any asset shows gains and losses. В The gains and losses can be very small. В For the fundamentalist they may be insignificant. For the 60-second trader, they are everything.
The technical chart may show that an asset, while rising, is due for a quick correction. В The 60-second trader will pounce, making many 60-second trades hoping to ride the correction.
The Logic Behind the Strategy
You expect an asset to rise over the course of the day. В But you also know that there will be many short downturns as investors come and go. В The 60-second strategy says that the trend will follow expectations but moment-to-moment the asset will fluctuate. If you use the 60-second strategy, you can effect many trades in a short period of time. В If your analysis was correct, you will have far more in-the-money outcomes than out-of-the-money.
Support and resistance are terms common to technical analysis. В An asset rises until it reaches its resistance level and starts to fall. В An asset falls to its support level and then begins to rise. Over time, a pattern emerges. В If the asset rises long-term, it breaches the resistance mark eventually. В It then rises until a new resistance level is reached. В The same happens on the downside. The asset breaches the support level and falls until it reaches a new support level.
Traders who can ride the short wave created when an asset breaches either the support or the resistance levels can make a large profit in a very short period of time. В As always, you must be extremely careful. The asset may reach the new support or resistance level very quickly.
Option Types
The 60-second option is suited for all option types but not in all circumstances.
A 60-second high/low option is suited for a short correction as mentioned above.
A 60-second range option is suited for an asset that has been in the doldrums for a while. В This can be true even for an asset that you correctly see advancing or contracting in the long term. If you see the asset wandering within a given range for a while before the upward or downward trend regains momentum, you can make many range-option trades and, again, be in-the-money far more often than out-of-the-money.
The more speculative 60-second trader may see uncertainty developing. В Even though the asset is likely to find its true course soon, the 60-second trader can reap large profits from just a few minutes of market uncertainty.
60-second touch options are the riskiest with one very important exception. В In the few minutes after truly important news reaches the markets, the asset may jump or dive enough to justify quite profitably a slew of 60-second options.
The Bottom Line
While 60-second options are speculative and risky, the trader who has invested time in learning technical analysis can see short trends developing. In these cases 60-second options trades give you a great opportunity to achieve high profits quickly.
- Posted by Denise Marie