60 second options are the hottest thing on the planet right now when it comes to retail trading, and how could they not be? There are few things more exciting than betting “high” or “low” on an option and waiting over the next tense minute for the action to unfold to see if you will profit or lose. And if you are a serious trader, you can make a lot of money within short time frames if you know what you’re doing. Few things are more thrilling than becoming a long-term profitable day trader. Taking some time to pause and think, research and test can save you a lot of money and headaches though. What should you know before you start trading 60-second options?
- What you can gain fast you can lose faster.
- Most binary options brokers are unregulated.
- Testing and training can help you make reliable profits.
- Starting slow can pay off.
- Taking breaks can pay off too.
What you gain fast you can lose fast(er).
The reason that 60-second options are so appealing to new traders (and veteran traders too) is that there are few things more alluring than the idea that you can make money in minutes. If you open an account with $250, how appealing is the notion that literally within 60 seconds, you could end up with almost double that? And that five minutes from now, you could have $1000? Perhaps in an hour, you could have $10,000? Maybe overnight you could have hundreds of thousands of dolla6rs, all from that $250?
If you open an account with $250 (24option.com), how appealing is the notion that literally within 60 seconds, you could end up with almost double that? And that five minutes from now, you could have $1000?
Of course, that is not likely to happen. But it is easy to lose sight of that when you start doing the math in your head and thinking about how you could grow and grow and grow your tiny account. You might start calculating exactly what the shortest timeframe is in which you could reach a certain high dollar amount. But think about it. If it were really that easy, wouldn’t we all be rich?
Picture the opposite scenario, which in all honesty is far more likely to happen. You deposit your $250 and you get in on a 60-second trade which turns against you. You bet $100 on your trade, and you lose almost all of it. You are now down to $165. You bet on another 60 second option, $100 again, in a desperate bid to “win it all back.” You lose again, and now you have less than $100 to work with. After another lost trade, you have less money than you are allowed to withdraw, and you have basically lost everything. All in three minutes.
This should not make you pessimistic. It should make you cautious. 60-second options are great, but try to bet small especially to start out. Regardless of the type of trade you make and the expiry time, you should try to bet no more than 2.5% of your account on any given trade. That is more important with 60-second trades than any other type!
2. Most binary options brokers are unregulated.
There is a pervasive myth that binary options brokers are regulated at all. This is not the case. Aside from Nadex and a couple of other exchanges, almost all binary options brokers are unregulated as binary options brokers, whether under U.S. law, Cyprus law, or any other country’s laws. There are some however which are regulated as gambling commissions, private banks, or Forex brokers. These brokers can offer you some degree of protection, because they are at least bound by some laws governing financial business with customers. Also, if you are not from the US, Banc De Binary has recently became the 1st options broker recognized by the UK’s FSA.
Regulation isn’t everything. Transparency is important as well. A broker that tells you openly it is unregulated but which offers you clear terms of service and excellent customer service is probably more trustworthy than one which has some form of regulation but provides you with hazy information, dodges your questions, and does not return emails. You can also look for information on the reputation of a given broker online and search for the opinions of other traders and reviewers. We have compiled a list of reputable brokers which offer 60-second options. You can check out news and reviews on those brokers here.
3. Testing and training can help you make reliable profits.
If you are a gambler at heart and you are interested in trading binary options for fun more than for profit, then you can easily overlook the possibility of actually becoming a successful trader. If it isn’t important to you, that is fine, but if you want to make more money over the long term, you might want to consider doing some testing and training first. There are people who trade for a living, just as there are people who play poker for a living. This does not have to be played like a game of roulette. It comes down to what you are willing to put into it. If you are willing to do more work, you can generate more success by reducing your risk exposure. See this page on how a binary option bet works if you are not sure http://www.fastbinaryoptions.com/binary-options-explained-anatomy-of-binary-option-trade/
How do you test and train? Start by learning everything you can about the financial markets and how binary options work. Next come up with some kind of a trading method which has rules that you can follow. Those rules need to be concrete and consistent. Then, test those rules by looking at historical data on old charts and seeing whether you would likely have won or lost trades placed in the past using those methods. Then, open up a demo account and test on live data without risking real money. Once you are able to do that profitably, imagine how much money you can make when you trade for real! Like those poker players who have learned enough to play cards for a living, you can change the nature of the game into one which can pay you again and again.
4. Starting slow can pay off.
Another way you can make 60 seconds pay off is to start on a different expiry time. That probably is not what you want to hear, but it is a fact that most traders have an easier time being successful when they trade “slower” expiry times. It can be psychologically easier to deal with a trade which is unfolding over a longer time periods, like an hour or several hours. Every person is different, however, and some people really do excel when they are given very short term trades like 60-second trades.
Still, consider that longer-term position trades can last days, weeks, even months. So a trade that lasts an hour or a day is still relatively “fast” by comparison. Starting with trades that take an hour or a day gives you a chance to figure out what you excel at. You also can learn how the platform works without losing money because you don’t know where to click to cancel a trade in a matter of seconds. Once you get the basics of binary options trading down and/or realize that you do better with shorter expiry times, you can move on up to the 60-second trades and see how you fare.
5. Taking breaks can pay off too.
Any type of trading carries the risk of being addicting, but 60-second trades in particular have that danger. They are fast and easy to make, and therefore have a similar appeal to putting coins in a slot machine and pulling the lever. Since they are over so quickly, the urge to make another immediate investment either to add to your winnings or try to counteract your losses can be overwhelming.
If you struggle with that powerful urge psychologically, taking breaks can help you save and make money. Taking breaks and having a balanced life are important for any type of trader, but for a 60-second trader, they are perhaps even more critical. Someone who trades longer expiry times may only find a few good setups in a day or a week. If you are a 60-second trader, however, you may find dozens of great trades in any given day. The more you sit in front of your computer however, the more likely it is you will lose perspective and start overtrading. This can lead you into bad situations fast, so try to balance out your life so you can keep a level head.
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