With the idea of ‘maximum profit in minimum time’ at the forefront of many binary traders’ minds, the 60 Second Strategy is a popular yet effective strategy which maximises not only the number of trading opportunities available but also allows traders to know the outcome of their trade in just 60 seconds!
So what is the 60 Second Binary Options Strategy?
The 60 Second Strategy is a fast paced digital style of trading binary options which gives traders the opportunity to enter a short term strategy using a 1 minute chart to forecast price action direction after just 60 seconds. Using a very short expiry time (an expiry of exactly 60 seconds) and only one of two possible outcomes (a win of a predetermined profit % or a loss of the investment amount), the 60 Second Strategy offers traders a very dynamic opportunity for quick profit (or loss) on price movements within any given market.
How much profit can be made?
Depending on a trader’s correct analysis of the market and the pre-determined payout percentage from the broker, traders can expect 60-75% profit on a winning 60 Second binary options trade or a 100% loss on a losing trade. This means a high win ratio of at least 6 wins out of 10 trades is essential to the trader for profit.
Which direction will the market move?
To reduce the potential for an option to expire ‘out-of-the-money’, 60 Second binary option traders are capitalizing on strong market moves in their chosen direction. The trader of a ‘call’ option will be of the view that the market will move in an upward direction. Conversely, the trader of a ‘put’ option anticipates the market will move in a downward direction. Because a 60 Second Strategy trader is not concerned with long term trends, it is essential a high probability price action setup is adopted for profitable trading signals.
What is a ‘high probability’ setup?
As the name suggests, high probability trading is when a trader feels a trade (or trade direction) has a very good chance of success. To a liberal trader, a high probability trade is one which is successful two out of three times. To a conservative trader, the success rate is four out of five times. To identify a trade as being high in probability, a trader will primarily look at a security’s price history including swing highs and swing lows, trend lines, and support and resistance levels. Binary traders can use price framing to identify these key price action levels.
How to ‘price frame’?
By framing price action a trader can easily recognise high probability entry and exits points, which for a binary trader, will help identify the direction of the trade. Because framing is based on prior price action and capitalises on the tendency of markets to trend, 60 Second Strategy binary traders can use short term price charts with a trend channel tool such as Andrews’ Pitchfork to identify high probability trades.
Developed by Dr Alan Andrews, Andrews’ Pitchfork consists of three parallel lines usually drawn from three consecutive major peaks or troughs. The three parallel lines formed by Andrews’ Pitchfork can help predict channels of support and resistance in a trending market and identify breakout points in the price channels making it an ideal tool for a high probability 60 Second traders.
60 Second Strategy Using Andrew’s Pitchfork
Using a chart with 1 minute price bars, in an uptrend, Andrews Pitchfork can be drawn by first selecting the swing (or trend) low. This line acts as the Median Line. The reaction high and reaction low (also known as pivot points) are identified forming the pitchfork trend-lines.
In an uptrend, the lower trend line acts as support to define the overall trend and in high probability trading, the median line offers resistance while also defining the strength of the short term trend. Prices should reach the median line on a regular basis during an uptrend. Failure to reach this line shows underlying weakness that could foreshadow a trend reversal.
In high probability trades, short term traders look for breaks in support (or resistance levels), clean breaks which signal trend reversals and lower (or upper) trigger line breaches to act as call (buy) and put (sell) trading signals.
Because binary options traders are not concerned with how much an asset moves in price, only the direction the 60 Second Strategy using Andrews’ Pitchfork is highly effective in identifying short term price movements for profitable high frequency trading.
Responsible money management ensures that the losses don’t mitigate the profits.