Binary options attract traders with their relative simplicity. In comparison with Forex and especially the stock market, there are no commissions, warrants, etc. And the most favorite of beginners are binary options 60 seconds. At first glance, it is enough just to catch a strong trend and in a minute get 70-90% profit. But it is precisely in this simplicity that the danger lies.
Why minute options are dangerous for beginners
Have you ever seen a perfectly flat trend? It does not exist. And whatever the strength of the trend, it will still have zigzags, dips and corrections.
What are the dangerous minute options:
- price noise. On short timeframes the price behaves unstably. Even on an uptrend, a correction occurs, which is very difficult to explain. The market is dynamic, individual small volumes of transactions generate noise;
- redrawing indicators. At the moment when candlestick analysis and oscillators show a trend reversal, candles are redrawn. And if on a longer expiration a reversal is still inevitable, then on a minute expiration, the continuation of the trend after opening the option instead of the reversal will bring a loss;
- despite the emergence of the main trend at the time of news release (turbooptions strategies are especially popular in conjunction with fundamental analysis), the market remains very volatile. Investors evaluate the news and make a decision, the “bears” are trying to crush the “bulls” and vice versa. Even if the main direction is clear, it will take it back for a few more hours. But at the minute interval, the market will be volatile.
How to trade binary options for 60 seconds:
- Do not work in a flat. Flat is a poorly predictable market movement that can change at any time;
- when working with resistance and support levels or with channel strategies, do not expire 60 seconds. The expiry should be equal to at least half the time it takes the price to overcome the distance between the channel boundaries;
- catch a strong trend, but, working with the news, wait 30-60 minutes;
- look for a broker who has no slippage and redrawing of indicators;
- note that the quotes and the reaction of the indicators to them may be delayed.
Summary. Beginning traders are not advised to trade on short timeframes with short expirations. If you have just recently become familiar with options, then choose less liquid currency pairs and work at one-hour intervals. When choosing a broker, we recommend to pay attention to the company Grand Capital, which offers services in the Forex market and binary options.