Binary options trading enables investors or traders with the opportunity of making good returns on their investments, in a short time, and without investing large capitals. You can invest in as little as $4 per trade. The advantages of binary options trading include high returns, small investments, short expiry periods, no commissions, and access to multiple trading markets for 24/7.
High frequency trading or HFT or ’60 second binary option’ is a relatively new and vibrant concept that can be applied to profit from quick market movements. Traders execute ‘Put’ and ‘Call’ actions, which expire in a minute.
How HFT works?
HFT is conducted by using fast computers, to transmit millions of positions at lightning speed, and possibly make millions in a few seconds. Computers make use of pre-written algorithms, which are available through different market conditions. For technical analysis, you will need to consider some of the aspects like, pair movement & correlation, trend direction, breakouts & rebounds, support & resistance level, approach angles, and more.
Technical indicators can also be incorporated within HFT algorithms. Advanced traders use these HFT setups, and scalp the trade market to reap profits very fast. If you do not have access to automatic trading algorithms, then to carry out multiple trades within milliseconds is not humanly possible. However, you can use shorter trade formats like the 60 seconds trades with binary options. To do that, you will need to have a well planned entry-exit strategy in place.
Binary option 60 second strategies
- Breakout strategy – In breakout strategy you will search for a currency pair, which is trading within a tight range for some time. Trading range is defined by ceiling and floor. The ceiling (straight line) is the highest price of the underlying asset, and floor resembles the lowest price. After the price bounces against the ceiling or floor many times, it breaks out finally.
This breakout is a signal for initiating a trade, accordingly. If breakout takes place above the ceiling, then place ‘Call’ and if it is below the floor then initiate a ‘Put’. In this kind of volatile trading, you must never risk more than 2% equity per position.
- Support & resistance strategy – In this game plan, the trader hops in the trade, while the currencies are constrained within a tight range. It means that they have not rebounded against the support (floor) and resistance (ceiling) level. This HFT strategy requires extreme alertness, as its risk level is defined as a medium.
- Follow the trend game plan – The trades are initiated on slight deviation from upward and downward trend lines. Therefore, the trader needs to have a high level of experience to pull it off consistently. If price moves upwards from the lower trend line, then the underlying instrument is rising towards bullish channel, so here you enter a ‘call’ binary option. If the trend line reverses downwards after it bounces the upper trend line, then it is moving towards bearish channel, so you will need to enter a ‘put’ option.
The HFT binary option strategy seems very simple, but the trades must be placed after an in-depth market analysis, and appropriate signal identification. Trusted brokerage platforms will give you access to best trading tools and latest information, to get the profitable edge. In the end however, your success will depend on your competence to read the market moves.