60 Second Options a Strategic Analysis for Technical Trading

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60 Second Options a Strategic Analysis for Technical Trading

Posted on by John Thiel

60 second options have quickly grown to become one of the most popular and exciting forms of binary options trading. Their addictive nature and extremely high level of risk makes this trading feature particularly attractive to aggressive traders wanting to make large amounts of money quickly, as well as inexperienced traders wanting to try out something new.

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Technical traders wanting to execute 60 second trades will have an extremely difficult time trying to ascertain the direction of the particular asset they have chosen, mainly because 1 minute turns it into more of a financial game or crap shoot than a serious form of investing. On a strategic level there are a few trading methodologies out there that can inspire you and at least on a theoretical level give you an edge. The first methodology is high frequency algorithmic trading, which is particularly suited for 60 second trading, however if you don’t have the right software you will end up losing all your money. Now, moving in and out of positions very quickly is a very well know strategy, however mastering it is a completely different story. Over 60% of all US equity volume today is estimated to derive from HFT (see Exhibit 1 below)

High Frequency Trading - BinaryOptionsAnalyst.com

Technically speaking, if you have multiple positions open on various stock options and are implementing HFT methodologies in your trading strategy, you can hedge your risk by using protective puts. Now, I’m not sure all brokers have this feature enabled, but just like everything else in life, if you invest heavily you should be able to pick up the phone and call your account manager to get this done for you. Just to clarify, HFT is done by machines that execute millions of small trades and move in and out of positions. Of course, the aim of this post derives insight and a sense of “direction” from this form of trading, but it is understood that HFT can’t be used for binaries in its classical form.

Another methodology is called rapid fire trading, which basically assumes the same logic and more recently “flash trading” has entered the scene and caught the eye of the SEC and congress. This method previews some orders to a certain group of investors hoping to match trades prior to exhibiting the ask price to the markets. This is not visible to anyone looking at the charts since the trades are displayed and then executed in milliseconds. Now, I would take this to the next level and try to simply form a group of professional traders, each one doing his research and taking positions on various stock.

Now, obviously you would not need to have a preview of trades because if you have a network of let’s say 1000 traders with 90% of them taking a put position on APPL stock, you can pretty much know what’s going to happen.

To summarize, if you are a technical trader looking for a strong entry signal on an underlying asset in 60 second options, you need to understand that you are actively engaged in a form of financial betting. Just like any form of betting, there are tricks of the trade that you can use to get the best possible edge on the house. HFT with protective puts, rapid fire, flash trading, and networking with other traders are just some of the strategies you should consider when investing in binary options online.

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