Options trading is the fastest, most straightforward way to almost double your investment. As fast as one minute, any trader can make a 70% to 95% profit by predicting the price direction. In addition, you have a 50% chance of making it on any individual trend by just guessing the direction.
Now, guessing is not a good idea. In the long run, you will lose your money. The good news is that there are ways to increase your chances and make binary option trading a profitable activity so you can make a profit as fast as 60 seconds. Continue reading to discover how you can do this more effectively.
How does it work?
Binary options trading is a market in which its participants try to predict whether the price of an underlying asset will go up or down. The 60 seconds binary options are exactly that.
The 60 seconds time frame is the shortest. It allows the trader to make multiple deals in a short time which is an attractive feature.
Reasons to use for traders
By just guessing, you’ll have an average winning rate of 50%. If you do so, you’ll be right half of the time, but since you don’t double your investment, your profit won’t be enough to make up for your losses.
For example, let’s assume you trade for one hour 45 times a 10 dollar option. This means you’ll be risking $450. If your broker gives you a 95% profit, you’ll get $9,5 for every $10. So, if you guess 50% of the trades, you’ll make:
45 trades x 0,5 winning rate x $10 investment x 1,95 reward= $438,75
So, you’ll make $438,75, but you invested $450, so your net losses will be $11,25.
That’s why you need a strategy. Winning half of the time is not enough to make a profit. It is not even enough to break even. So the only way of making money is to improve your winning rate.
Let’s see what it would take to break even in the example above.
45 trades x X winning rate x $10 investment x 1,95 reward = $450 reward then, $450 reward45 trades x $10 investment x 1,95 reward=0,5128
Only by improving your winning rate through the use of strategy can traders make a profit. In the example above, anything above a winning rate of 51,28% will make a trader profitable. Let’s see what would happen if the trader achieves a winning rate of only 55%.
After 45 trades
45 trades x 0,6 winning rate x $10 investment x 1,95 reward = $482
So, after just one hour, the trader would have made $32.
How to use it?
So, it should be clear that the success behind binary options trading is finding a strategy that consistently achieves a winning rate barely above 50%.
Although, for brokers that offer lower profits, the winning rate must be higher. But making small profits consistently could be not as attractive if you only make one trade every day. In the example above, the trader profits $32 after 45 trades in one hour.
Making this on a daily binary options trading would mean that a trader would need 45 days to make a $32 profit. This is not attractive at all. But, that’s the advantage of 60-second binary options trading. By making profits as low as $1 or less per trade, you could make attractive earnings that could signify big money.
So, all this sounds very good, but how can we achieve that? Pay attention because we are about to present to you a simple strategy so you can make money on 60-second binary trading.
The key to having a winning rate beyond the 50% is to establish a strategy. The following strategy will show you the basic signals to apply.
Where to enter
To know when to enter the trade and make a call option, you need to use a chart with a one-minute time frame. In that chart, you will choose a time frame of fifty candlesticks from right to left. To choose where will your 50 candlestick range will start, you need to check three conditions:
- The beginning of the range should also be the lowest point of the range.
- The RSI should be at 20% or below.
- From the point where the RSI is at 20%, the RSI should start rising.
- From that point to the right, the price trend should be bearish.
If the RSI moves in the opposite direction than the price, it is likely to see a reversal. If the point meets those conditions, you count 50 candlesticks to the right. Next, identify the high of the lowest candle and wait until the current price surpasses that point. Once it does, make the call option.
For downtrends, the analogous strategy should be applied.
Where to enter
To know when to enter the trade and make a put option, you need to use a chart with a time-minute frame. In that chart, you will choose a time frame of fifty candlesticks from right to left. To choose where will your 50 candlestick range will start, you need to check three conditions:
- The beginning of the range should also be the highest point of the range.
- The RSI should be at 80% or above.
- From the point where the RSI is at 80%, the RSI should start falling.
- From that point to the right, the price trend should be bullish.
When the high of the 50 candles is reached, the trader must activate the put option.
Pros & cons
|•The possibility of making lots of trades in a short time.||•It is harder to predict the direction of the price in 60 seconds.|
|•Because you can make short trades, small profits are still attractive.||•There is less time to analyze the signals.|
|•Less trading time.||•Because you can make so many trades, there is a risk of letting emotions take control and stop using your strategies.|
Binary options trading is one of the simplest ways of trading. The decision a trader should make is simple, and there are many tools to help traders decide. Also, the losses are always capped, and the reward is high.
However, without a strategy, a trader will lose all his money. To make attractive profits, traders have to make lots of traders, and on average, the earnings will be small. However, the 60-second binary options allow traders to make lots of trades in no time.
So, this small profit will add quickly, and with just a few hours, traders can have productive days. This doesn’t mean in any way that this is an easy job. Although it sounds easy, finding the right strategy in such a small time frame is very difficult. All strategies must be tested in a demo account first, and once it has been tested, traders must be capable of sticking to the strategy.