The Importance Of Time When Trading Binary Options

Timing is a critical element of all trading, but it has a unique function in binary options trading. Whilst most traders will always look at the timing of trades, binary options traders will not only look at the time of day they trade, but also the expiry time that they choose on each trade. This expiry time, ranging typically from as little as sixty seconds to several days is something that needs to be considered as the critical factor in purchasing binary options. This decision could mean the difference between binary options closing in or out of the money and, with the lack of stop loss or take profit level decisions; it is the key factor in a trader’s success.The fact that binary options place so much emphasis on timing is not something which should be considered negatively. On the contrary, the simplicity of binary options as a straightforward investment with an expiry time is one of its major attractions. Although it provides just one decision for traders to make by removing the complexities associated with stops and profit targets, several other timing factors should be taken into account when making your first trade.Timing with binary options trading involves several elements beyond simply the expiry of the options. The time that the trade was placed relative to the activity patterns of the market is an example where timing needs to be considered. Trading hinges on good and bad times to look for opportunities and this is true for binary options despite the fact that binary options can be traded 24 hours per day. Similarly, traders have to manage their active trading time to optimise the level of profit and limit losses. Developing a good understanding of these elements is beneficial for all binary options trading strategies and begins by developing a good grasp on when might the best times be to trade certain markets.

The best time to trade forex market

Currency markets are active 24 hours per day as the sun moves around the earth and markets open and close around the globe’s financial centres. They are, however, subject to both active and quiet times, depending on the currency pair and also on unforeseen news releases. Overnight currency markets are generally quieter than those traded during daylight hours, although this will largely depend on both the currencies in question and the geographic location which they are located at. For example, the USD pairings will tend to be most active during the morning trading hours on New York’s Wall Street when it overlaps with the European trading session. During the US trading session, however, the non-USD paired currencies in the opposite side of the world, such as Australian dollar against the New Zealand dollar, are likely to be quieter as most of the large institutions and influential traders sleep.

The best time to trade stocks and stock indices

Stocks and indices go hand-in-hand with the individual stocks compiling the indices. Stock markets usually officially open between 8-8:30 AM and close at 4:00-430 PM. These are the daily periods when the market will experience the most volatility and the most opportunities for traders will become apparent. Unlike traditional trading however, binary options do not require a great amount of movement in order to result in profits. This is due to the fact that binary options do not require price to move substantially further than the entry price in order to generate substantial profits. Price can simply move fractionally higher or lower for the investment to be profitable and this is a major advantage for binary options in terms of timing the entry in to stock and index markets.

The best time to trade commodities

Commodities are also 24 hour markets which are available to trade throughout the day and night from any location. Similar to forex and stocks, they are most active when the largest markets are open, but they can also react strongly to news and events making them potentially volatile during the night. The reason why commodities are affected by news is that many can be considered as the raw materials which respond to growth data. Poor forecasts or bad growth figures can be announced sporadically and the timing of these releases is fundamentally important for binary options traders. Since commodities are particularly affected by national growth and GDP figures it is good advice for all traders to know when these are scheduled to both avoid any shocks and also to look for trading opportunities. It is also worth remembering that commodities can be strongly affected by unpredictable shocks, such as political unrest and natural disasters which can occur without any warning.

The benefits of 24 hour binary options trading

The ability to trade binary options on a 24 hour basis is one of the major attractions for both new and experienced traders. Whilst some other markets, notably forex and spread betting, also provide 24 hour trading platforms, binary options have a very significant advantage for those looking to trade both day and night. This is not to suggest that a trader would necessarily want to trade both all day and all night, which would in fact be detrimental and demonstrate negative time-management, but for those seeking the flexibility to trade either, binary options can provide this. The reason for this is that binary options can be traded successfully even in very slow or sideways markets. They are not reliant on intense volatility or pip movements in order to be profitable, but require only small movement higher or lower than the strike price which can result in profitable expiry. For traders who have day jobs, this provides a great opportunity to trade during the evening or even at night when markets are slower and traditionally seen as unprofitable by other traders.

The rollover feature provided by many binary options brokers

The rollover feature is provided by many binary options platforms as a means to prevent losses and increase traders’ chances of success. The idea is based on the simple assumption that when binary options near their expiry and they are out of the money, providing an extension will give them additional time to recover and, hopefully, close profitably. This provides an excellent opportunity for those who have done their research correctly to turn a losing position in to a winning position by using this unique feature. However, it is also worth noting that using this feature can extend losses, given that an additional percentage investment is required in order to roll over the binary options.For more experienced traders this can provide an excellent opportunity and a second chance to improve the timing of their trade. Roll over’s allow traders to select any additional expiry time which is helpful and enables this decision to be made in the face of changing market circumstances. An example of successfully using this feature may be when a short term market shock distorts the market’s underlying trend and results in a short term price spike against a binary options trade. Experienced traders may assume that price will return to the original trend, but will need to extend the life of their binary options in order to achieve this.

Effective time management is essential for all binary options traders

Time management is a very important element in becoming a successful trader and at the heart of this is the very simple distinction of which type of trader you are. The type trader in relation to this question is the straightforward difference between those who do this as a full-time profession and the majority who undertake this outside of a main job. This is a critical difference in distinguishing whose livelihoods depend on their trading and those who trade with spare financial resources beyond that required for food, rent etc.Needless to say, those professional traders who are lucky enough to make a living are exceptionally good at their jobs,as they need to be in order to survive as a full-time trader. They are also highly organized in terms of their optimum trading time and the markets that they prefer to trade. For part-time traders, who are perhaps also working full or part-time in a regular job, the choice of markets may be much more limited and will most likely be based on the times that they are able to trade, rather than the availability of all markets to a full-time trader.One thing that both full and part-time binary options traders have in common is that the need to exercise effective time management. This applies to those who have vast amounts of time to trade and those who have very little. As with most profitable ventures, quality over quantity will always prevail and given the availability of 24 hour global markets, the necessity to enforce this mantra is even more apparent. Those who are able to trade most successfully are likely to not only know when the best time is for them to begin trading, but also the best time to stop. Overtrading is a symptom of bad time management and the tendency for this to occur will start with a fruitful trading session before trading away the profits to end up negative, tired and frustrated.Setting targets that are based on either a specific trading time or a profit/loss threshold for the day will help to avoid the situation and provides a good foundation for time management. This can be enhanced by trying to normalize your lifestyle whilst trading as you would do with any work; taking breaks and looking away from the screen for short periods as well as eating and sleeping normally. Professional, full-time traders tend to sleep poorly and work as late as necessary due to the fact that they literally rely on the success of their trading to live. Part-time traders have the advantage of trading as and when they want and this makes being selective and managing trading time far more straightforward.

Basic rules for binary options time management

There are several basic rules which can be applied to all binary options traders and which will improve time management and, hopefully, the potential to be a more profitable trader.

Selectively executing your binary options trading strategies

As a 24 hour market, it is essential that you select which markets and which times will optimize your chances of success. For a lot of people, this will mean not only choosing a suitable market for your binary options strategies, but also the ability to dedicate time to this. Understandably, for many it will not simply be work that clashes with access to the markets, but also family and social commitments. Establishing a dedicated period of time committed to trading will not only keep the time management of your trading consistent, but it will also provide the routine required to monitor performance and develop your binary options trading strategies.

Make sure your binary options trading times stay fixed

Whilst most activities outside of work can often be shuffled around in order to make way for unforeseen events, trading should not be considered in this group. Fixing the times that you have chosen to execute you binary options trading strategies is very important for consistency as well as generating meaningful returns from trading binary options. Committing to the time applied to trading should be considered in the same way as going to work; it is not optional, starts and ends at a specific time and can only be missed very occasionally. Binary options trading also requires a certain degree of understanding from those living around a binary options trader, as the long-term benefits of this are well worth it.

Be strict with ending your trading session

Many professional traders will say that success lies in exploiting the fear and greed of other traders. These are two emotional elements which help to drive market price fluctuation and are also major reasons why people will be tempted to trade beyond their set trading time. For those binary options traders experiencing a successful trading session, greed is the driver behind continuing in the search of higher profits. For those who have had a bad trading day, the fear of ending it with a loss will encourage many of them to trade later than normal to try to rectify the situation. Both of these situations can lead to lower overall profits and higher losses for those who chase a market in an emotional frenzy. Setting strict limits, whether in terms of profit/loss or a strictly defined trading timetable will prevent this and, most importantly, allows you to focus on the next trading day. Just as the end of a working day ends at a certain time, so should the trading day.If a trader can be strict with his or her time management in stopping trading, regardless of a profitable or loss-making session, it shows the required separation of emotions to become a successful binary options trader. Tomorrow is another day and another opportunity to be profitable regardless of how today’s trading session went. Limiting losses and appreciating profits without chasing trades will obviously benefit all traders; however, the ability to walk away with a loss and to focus on the following day’s trading takes not only willpower, but also highly effective time management.For those who are lucky enough to trade throughout the day, the temptations to overtrade are the strongest. This may be most effectively overcome by exercising a profit and loss threshold where, once hit, the trader will finish trading for the day. Such a threshold can be either a set number of units or a percentage based on the value of the trading account. Either way, this provides an alternative for those who may feel the need to trade until the job is done. In many cases the target may be reached earlier than anticipated and the trader can close up for the day, alternatively it may be necessary to work later before the daily target is reached.

Don’t simply trade for today, look to the long term

The one thing that distinguishes binary options traders from occasional gamblers is their longevity. Whilst gamblers will allow themselves the occasional punt, traders have to make sure that they can continue trading consistently. This means that today’s trading should not negatively affect the chances of being able to trade tomorrow and effective time and money management is necessary to reinforce this. One of the major benefits of trading within these strict rules is that it reduces the risk of over trading and pure gambling, especially when things are not going as planned on any given trading day.Losses are guaranteed to occur on any one day and the way that binary options traders deal with this will determine the length of time that they are able to trade. For those who refuse to accept this and hope to trade their way to a profitable position outside of their allotted trading session, the risks will be significantly higher. Long-term binary options traders will accept down days, maintain their carefully-planned trading schedule and look forward to another trading day the following day.

Summary

Whatever binary options trading strategies you choose to use, one of the most important factors in this will involve considerations of timing. For most traders, this will be the management of when they are able to trade on a part-time basis rather than those who can enjoy access to the markets whenever they choose. The careful balance between maintaining a job that provides the income that everyone needs to survive and trading with available, disposable funds will be common to all part-time traders, whilst professional traders will have significantly more pressure to perform given that their livelihoods depend on this.24 hour markets provide so many opportunities for everyone to be involved, regardless of when and where they want to trade. The existence of currency, stock and commodity markets which chase the sun around the earth allow trading day and night to fit within the timetable of any trader. Despite this, it is imperative that traders manage their time and access to these markets efficiently. More is certainlynot better in trading and exposure to the markets is proven to be most effective when trading is consistent and controlled. This means putting together a strict trading plan of when to trade and also to adhering to rules of termination o a trading session which is often the most difficult for traders facing both profits and losses over a single trading session. The negative emotional influence of both fear and greed are likely drivers of trading decisions at this time and will almost certainly become equally negative habits of the longer term for any trader.There are, however, multiple ways that traders can manage their time efficiently to make sure that they give themselves the optimum chance of success in the markets. This involves a disciplined approach to when and how long a trading session will occur each day and acts as a barrier to overtrading and loss of control. Part-time traders maintaining these basic rules will benefit not only from consistency to help develop trading skills and become experts in their markets, but also to deal with inevitable losses and trading sessions when things have not worked out. The most important and difficult decision here is being able to walk away from both profit and loss and look to the next trading day as all successful traders have learnt to do.

What are 60 Second Binary Options?

As you can probably tell by the name, 60 seconds binary options trades are a fast and furious type of trade that you can do in, you guessed it, one minute. This type of binary option trade is by far the quickest online, and that includes other trading platforms like forex trading and spread betting. With the latter, the shortest timeframe you can work with is typically five minutes. Spread betting and other platforms might be fast, but they are generally not as quick, nor do they deliver the same exhilarating feeling, of trading binary options in 60 seconds.Whether you are just getting started with binary 60 second trading or are already an experienced investor, it is a great opportunity to make healthy returns in a short amount of time. Remember, however, that a short timeframe means fast decision making, which inevitably increases the risk involved. At the same time, once you understand binary option trading and what it entails, you will develop the confidence to dive into 60-second trades without even thinking about it. Successful traders will often bring in returns of 75-85% from 60 sec binary options. When you read the articles and blogs about traders who work for an hour a day and make a mint, but do not share their secrets, it is likely that 60 second trading features are included somewhere in what they do.How is it possible to make such lucrative returns from 60-second options? Here are the essential considerations you need to make, and things you should have in place, which will give you every opportunity to succeed, whatever your level of experience may be.

Why Trade 60 Second Binary Options?

While experienced investors will look at the potential for high returns with short-term binary option trades – usually because they have the capital to bear the odd reasonably heavy loss – those new to 60-second option trading, and even to binary option platforms in general, might look at the potential risk attached and decide it is not for them. Critics of short-term trading in general, not just 60 second binary option trades, have long-called it a type of gambling. We wholeheartedly disagree with this analysis. Gambling is when you put money at risk without having any idea of the outcome, like staking capital on the flip of a coin, the turn of a card, or where the red ball will settle in a roulette wheel.When you decide to undertake short-term trading, you will use all of the information available, including charts, historical trend data, and advice from a broker or respected trader, in order to make an educated decision as to where you will place your investment. Making decisions based on evidence is not gambling; it is smart, which is why individuals do it every day of their lives, and why it is the foundation of the work of organisations like police forces around the world.If the data is saying you could make the same money in 60 seconds that you could in a month with another investment, what smart investor or trader would turn this down? In reality, short term trading is no different to a long-term investment in a global stock, a foreign currency, or a commodity like gold or iron ore. All you are doing is making an investment decision based on a smaller range of performance: 60 seconds instead of 60 weeks, for example.

Pros and Cons of 60 Second Trading

In all areas of life it is common for us to balance the pros and cons of something before making a decision. One overwhelmingly positive aspect of 60-second binary option trading is that you are 100% in control of the cons. The cons you will learn about are only downsides if you let them take over you. You are the one in charge of your binary trading account, and you are the one who will ultimately decide whether the cons happen.

Pros

  1. Opportunities to Make a Quick ProfitThis does not mean you should see short term trading as a glorified ‘get rich quick’ scheme; there are enough of those on the internet already without Bank of Trade or anyone else adding more. Yet, if trading binary options in 60 seconds is your primary revenue generator, it is a great way to either shorten your working day, or make as much money as you wish.
  2. More Regular Trading OpportunitiesThere is nothing worse for traditional, longer-term investors than when they see a great opportunity come up while their capital is tied up elsewhere. 60 second binary trading means that does not happen. You know at the end of the minute whether you have a return, and so can quickly move onto the next one.
  3. Potential to Capitalise on Market VolatilityInvestors and traders often dislike market volatility, but smart short-term traders can use it to their advantage. If there is potential for huge jumps or drops, then higher returns can be made by taking a chance that something significant might happen. Market volatility can often make the riskeward balance seem skewed, so remember to maintain clear thinking while trading such markets.

Cons

What are the cons you need to avoid and control to ensure short term trading remains in your favour?

  1. Missing TradesThe fast moving nature of short term binary trading means it is possible to miss opportunities. This will happen less the more experienced that you get, especially as you begin to identify potential trades far in advance.
  2. Your Own EmotionsEnjoying average returns of 75%, for example, does not mean every trade will bring in that number. Take each trade as it comes; it is easy to think that you lost in a minute, so you can gain it back in a minute, but doing so will probably only lead to higher losses. This works in terms of success, too. Just because you had a great day, or your last 10 trades have been successful, it does not mean you should start investing higher amounts or adapting a careless mind-set.

Getting Started with 60 Sec Binary Options

Once you are clear in your own mind that 60 second binary trading is something you wish to explore, whether due to positive experiences with regular binary option trading or because this is simply your entry point to the market, you are in a great position to get started.The first thing to do is inform yourself as much as possible and fill any remaining holes that may remain in your knowledge about short term trading, ideally using articles such as this one and others here at Bank of Trade. You can then move forward and start trading and enjoying potentially lucrative returns.There are many 60 seconds binary options brokers available online. We recommend that you choose one where you feel comfortable with the trading platform and feel that you can use confidently. At Bank of Trade, we have an intuitive and simple interface that is useful both for new traders as well as for those who are vastly experienced with binary options and other forms of online trading. We also provide great advice around where the best trading opportunities are, meaning you have the best possible chance of seeing success from the start of your trading.Although a 60-second binary options broker will often provide charts and various other data for you to digest and use to your advantage, it is often beneficial for traders of all experience levels to have their own software platform. This means traders can look at trends in their own time without needing to log in to their binary trading account, and that they can focus solely on trading when online. The best analysis software will allow you to break down trades by the minute for short term trading, but also enable you to see the bigger picture.

How to Spot Trends

While there are several technical indicators an investor or trader can use to spot trends using financial charts, either online or in a newspaper or magazine, for short-term trades trendlines are the only real tool at your disposal. When you are analysing the data within such a small timescale, looking at moving averages and support and resistance in any sort of detail is almost pointless.

Using Trendlines

If you are using a good online broker or your own financial analysis software, trendlines should be overlaid onto the charts you are looking at anyway. If this feature is not included, the next best thing to have is a tool incorporated so you can draw trendlines yourself. The last thing you want to be doing is exporting a print screen to Photoshop or sitting in front of your laptop with a ruler!You are looking for ‘tops’ and ‘bottoms’ when drawing a trendline. Look at the example image above; if you have three tops you have an upward trend, and three downs means a downward trend. Although you cannot predict the long-term future – why would you want to anyway with a 60-second trade – you can get an idea if a market starts to decline or grow before trading. This is never going to be an exact science with short-term trades, but it can help to clarify the level of risk and chance of success with any 60-second trade.

Understanding Patterns

Being able to create your own trendlines and understand how a potential trade is performing is only one part of achieving success. You then have to take this understanding and develop it further, so you can identify up and down trends, or at least anticipate them, prior to them happening.Understanding trend patterns – you might see these described as wave patterns or Elliot Wave trends in books and elsewhere online – is easy once you have identified the peaks and troughs of trades. You know that three tops or three bottoms indicates a trend change, so you can start to look for wave patterns when there is one or two tops or bottoms. If you see continuous movement between tops and bottoms, that particular trade is moving sideways and is unlikely to offer you any value from a binary trading perspective. To gain an idea of what could occur after the sideways trend, look at previous performance. Sideways movement is often a stabilisation following a dramatic leap or fall, and will often be followed by movement in the same direction as before, but at a reduced rate. If there has been long-term sideways movement, then the dramatic leap or fall is likely to follow this, so you should be ready to capitalise as soon as this happens.The importance of being able to spot subtle changes in trend patterns is exaggerated when it comes to 60 second trading. In terms of wider trading, you can often dismiss a small downward trend if you have evidence to show it will likely recovery by the end of the day or a longer trading period. With 60 second binary trading, even a small bottom could cost you your money, which is why it is so crucial you are switched on and stay away from potential losses as much as possible, particularly when the higher risk is clear.

Call Trades or Put Trades?

There is no difference in the meaning of ‘call’ and ‘put’ in 60 second trading compared with regular binary options trades. If this is your first experience of binary options, these can be explained as follows:

  • A ‘call trade’ is placed when you believe the market will grow, in this case over the next 60 seconds.
  • A ‘put trade’ is placed when you believe the opposite will happen, and shrink over the next minute.

Although we are not talking about gambling when we refer to binary option trading, the best way to understand this is to liken it to sports betting, when you can ‘back’ or ‘lay’ a certain outcome.When you know how to create your own trendlines, if you do not get them from your 60 second binary options broker or from your analysis platform, and you know how to spot the trends and understand patterns and waves, you can confidently place call and put trades as often as you wish.The biggest returns can be made from short term trading when you become adept at spotting when the price of something is hitting a peak or a trough. Trading as the market swings is how to enjoy the most lucrative returns, and when you are into a true upward or downward trend, you should be cashing in. Avoid placing too many call or put trades on one thing, however, as you can easily be caught and then miss out when the market moves in the opposite direction once again.

Strategies for 60 Seconds Binary Options Trading

All of the areas of 60 second trading covered so far provides you with an excellent toolkit to get started with short term trading here at Bank of Trade. What is left is to define a strategy that you can use throughout your short term trading.The safest strategy points to our earlier analysis of sideways trends. If you are looking for opportunities where the riskeward balance is in your favour, then look out for markets that have been moving consistently sideways for a while. When they start to move in either direction upwards or downwards following an extended period of stagnation, they become known as ‘breakouts,’ and this is when you need to be trading them. As soon as an up or a down trend is established, they will move dramatically. Depending on what it is and the interest level, you could even cash in on call trades before doing the same on put trades should it stabilise back to its original level.An often-cited strategy for short term trading is to hedge your capital and place a large number of call or put trades at once. If you are recommended this as a new binary trader, you should avoid it, as you could lose money quickly making snap decisions, especially if you are yet to grasp trend spotting fully within the context of 60-second trades. There is always the chance when you do this that all your trades could go wrong, which would likely leave you with little capital for future binary trading.Overall, the best strategy is to know what you are doing before you get started, meaning you will make smarter, more educated decisions and reduce the risk element as far as possible.

Why Bank of Trade Offers 60 Second Trades

There are several reasons why we offer 60 second trading options at Bank of Trade. Firstly, we understand the differing needs of investors and traders. While some are happy to place binary option trades or use a spread betting platform and leave it running all day, others might prefer to see how their trade has performed. If an individual only has a few minutes spare each day, then a 60 second trade enables them to follow a passion or make extra money without wasting nervous energy throughout the day thinking about what they will find when they check their laptop or smartphone at 6pm.As well as meeting a need, some traders simply prefer short term trading. This is particularly true of those who you hear about who ‘work on the beach.’ Although they probably work harder than they would have you believe it is true that, with experience, lucrative sums of money can be made from short-term binary options trading, and working for an hour or two a day can become reality for the more successful.

What is a One Touch Option, and How Can You Make Money from Them?

In the world of binary option trading, there are many different ways to get involved to try to make money, whether you are a serious investor or someone dealing in small figures looking to make a small incremental income on the side. One-touch options are one such way of binary trading, and are popular as they give the trader or investor a new level of control that is different from their usual method of dealing with binary options.

What is a One Touch Option?

One touch options can be exercised before the end of a specific trading period if they reach their target. One touch binary option trading works in a similar way to sports betting websites that allow you to ‘cash out’ if an income looks favourable, although the trader still has to wait for the binary option to expire as they normally would.These are often referred to as an exotic type of trade. The added level of flexibility and allure with this type of binary options trading comes because the trader or investor can set their own limits and timescales. They are available to buy at weekends when the markets are closed, offering an excellent opportunity to enjoy high returns outside of traditional business and trading hours.For example, if you were using Bank of Trade for one touch binary option trading, you could choose a particular stock or commodity, perform a call or put trade, and set your own target price. This type of trading differs from other types of binary option trading in terms of the payouts. A one-touch trade pays out as soon as a particular barrier has been exceeded. If you place a call trade on a commodity moving from 20000 points to 20010 points, the one touch option pays out as soon as it hits 20010.01. This is where this type of trading gets its name. After ‘one touch’ on the target price, your trade pays out.Much like regular binary option trading, there are only two outcomes available once you place your call or put trade. The barrier or benchmark you have set is exceeded, and you get paid, or it is not, and you do not get a return from your initial outlay. This type of trading is attractive because it allows traders and investors to make money on markets that are unsteady or volatile. A particular market might be trending upwards, for example, but the trader or investor might know that a higher price is unlikely to be sustained based on his or her own knowledge and previous history. Smart individuals can therefore make a lot of money by repeatedly dealing in this type of trade, and it is an area increasingly exploited by those with knowledge and expertise of binary options trading.

One Touch Binary Options: The Big Opportunity

There are several reasons why one touch binary options are seen as a huge opportunity, and why experienced traders love them and why beginner binary option traders are increasingly using them as their introduction point to these markets. Above all else, one touch trades can significantly enrich your binary option trading experience. Here are the main reasons why.

One Touch Returns

The potential for large returns is incredible; one-touch trades will commonly have a return between 150% – 500%. Contrast this to other binary trades, such as 60-second options, which typically return 70% – 85%, and it is easy to see why they are favoured so much. The level of risk a trader or investor takes on to see these returns, in terms of the capital they stake on a call or put, is within their control, too. Aiming for the bigger returns does not mean loading yourself with a higher risk. Clearly, there is a greater risk the more you expect the price to move, but in terms of financial outlay what you stake is the same. Contrast this with traditional trading and investing where the correlation between increased risk and reward is generally consistent, and you can see why people love one touch option trading. The higher returns are available because you are trading on the price increasing or falling to the level you predict. It is like choosing a sports team to win by a particular score rather than merely saying they will win.

One Expiry Point

One touch binary options with Bank of Trade expire once a week. For example, if a commodity closes at 20000 points at 1730 on Friday, you can place your put or call based on performance over the next seven days. Therefore, if you place a call and predict this particular commodity will exceed 200010, you only need it to reach that price once in the next week for you to see a return.

Fixed Price

At Bank of Trade, our one touch binary options are sold at a fixed price, which is not the current market price. This allows binary options traders using our platform to take advantage of favourable prices and the best market conditions in order to increase the likelihood of them seeing great returns.Like normal binary option trades, one touch trades are an “all or nothing” investment; you either get your full return, or you get nothing at all.These three points all demonstrate why one touch trading is becoming increasingly popular, and how they offer an alternative opportunity to alternative types of binary options trading, including standard trades and 60 second trades.

Buying Your One Touch Options

Buying your one touch options from Bank of Trade is easy. All you need to do is log into your trading account and select the relevant menu instead of binary options, option building, or 60 second binary options. Our options are available at a cost of $XXX per unit, and traders can buy up to X units, although there is no limit to how many one touch trades you can have going at a particular time.Whenever you buy one touch binary options, you will be presented with both the rate at which point your call or put will achieve its one touch, as well as the potential percentage return on your initial investment.

A Summary of How One Touch Trades Work

You know what a one touch trade is, you know why they are a huge investment opportunity whatever your objectives may be, and you know how to buy them; how do they work in terms of monitoring your trade?Options can be purchased from midnight on Saturday morning to 1900 on Sunday evening. They are then traded from midnight on Monday morning to 1710 on Friday of that week. The options you have bought and are trading then have their prices taken at 1700 each day. The prices, for avoidance of confusion and doubt, are taken from the Reuters sample rate, ensuring fairness and consistency for all traders and investors. If an option has moved above or below the call or put rate during the five weekdays, the return stated when the options were bought is paid out. Regardless of when the call or put target price is hit, monies are transferred to trader accounts during the Friday evening following the ceasing of trading for the week.All one touch platforms should offer a similar setup, so you know what you should be looking for and to expect in terms of timescales and deadlines.

Example

To give you an idea of how one touch binary option trading could bring you returns, we have prepared the following example.Say the commodity is gold, which has a starting price, known as a spot rate, of 1000. When you look at this one touch option, you will see the rate it needs to grow or fall in order to see a return, which is called the “in the money” price.In our example, gold would need to move from 1000 to 1010, which in this case would give you a 500% return. If you took out this one touch option on Saturday, you would then need gold to reach a price in excess of 1010 at 1700 hours on any day, Monday – Friday, for your option to expire in the money. Failure to do so will see the option expire out of the money, and there is no return.

Conclusions

For traders and investors who already enjoy binary trading, one touch options give them the opportunity to try something different. Due to the more specific nature of one touch trades, they are often best suited to experienced traders, although they can be an exciting introduction to binary option trading for anyone who finds the simple call or put mechanism too basic for their own tastes.You can open your one touch binary option account with Bank of Trade and get started trading right away, as well as benefit from our range of advice and resources that aims to point you in the right direction and make your one touch trading as productive as possible.

Binary Options Risk Management

Risk management and the 5% club

For all new traders, the choice of what, where and how to trade is absolutely outstanding. The internet has not only broken down the mythical image of trading as an exclusive activity, but it has also changed the way that individual traders can interact with endless markets on a 24 hour basis. Over the past ten years trading stocks, forex, spread betting and binary options have become available to everyone with an internet connection and a computer. With this explosion in popularity, a whole host of brokers and platforms have arrived along with websites dedicated to traders’ needs, forums, software and a wealth of literature for novices to learn how to make money from the comfort of their own home.Trading binary options, for example, no longer requires a big bank account and a Wall Street office. Within two minutes an account can be opened by anyone residing in a jurisdiction which allows online speculation and options can be purchased with the click of a mouse. Alongside the sheer simplicity of placing a trade, the brokers, software developers, support websites, strategists and analysts all thrive of the growing popularity of online trading. Popular advertising tells new traders that they can make hundreds or even thousands of US Dollars per month and hundreds of thousands of new traders join the market with this in mind.The thing that most of those with an interest in selling their products to new traders fail to explain is that approximately 95% of new traders will fail to make any money trading.The underlying reason why such a small percentage of new traders are able to be successful trading anything is because they have a thorough understanding of the risks of trading before throwing their money at the market. Whilst it is easy for any new trader to understand that all speculation is littered with the risk of losses, it is the 95% of new traders who consistently fail to act on this information. Risk management is therefore not just a theory or something to only implement occasionally, it is a membership card to a small club of successful binary options traders who use this to stay ahead of the other 95% who are consistently unprofitable.

What does risk management involve?

Risk management varies from trader to trader, depending on the individual circumstances and type of trading being undertaken. However, it also has several features which are central to all binary options traders. The first thing to acknowledge is the obvious fact that all financial speculation carries the risk of losses. If everyone made substantial amounts of risk-free money, the markets would not only cease to exist, but nobody would bother going to work. Risk is therefore essential to the markets and the management of this is central to the success of any trader.

Why it is so difficult for new traders to be profitable

One of the key difficulties for all new traders, and one of the principal reasons why many only ever flirt with the 5% club occasionally is that most unsuccessful traders will tend to focus only on profits. This is clearly not difficult when brokers, platforms, books and tipsters are throwing arbitrary profit figures in order to encourage new traders to sign-up or purchase their trading guides. Profits are attractive and losses are not, which is precisely why many brokers will not provide the extensive risk management education necessary to support new traders to become successful and profitable over time. New traders therefore begin full of confidence and enthusiasm which soon begins to fade once their capital reduces rather than steadily increasing. Instead of focusing on profits, if risk management is the starting point for all new traders, then many more will be successful in the long term.

Start with risk and watch the profits develop

Starting with risk management may sound like the boring option for everyone eager to begin to make money trading but it is the only way to ensure long-term trading success. The reason why so many traders fail is because they fail to address their risk, trade impulsively and without a plan and eventually deplete their account. Before looking a how to practically apply successful risk management it is important to look at the ways in which risk management can be applied to improve the potential for profitable returns.Regardless of the strategy or method of investing that a trader chooses; by protecting the capital that they already have will substantially improve their chances of success. Failure to incorporate the basics of risk management will turn a trading account in to a gaming account within no time at all. Below are several basic tenets to trading and then we can see how these can apply specifically to trading binary options:

  • Limit the first depositMany platforms require new traders to make a deposit in order to begin trading and often these are small relative to the amount of capital that a trader has put aside to trade. The temptation for many is to fill up their account with all their funds and begin trading immediately. However, as with all new ventures, proper risk management would encourage a trader to only part with a small portion of their funds within one account initially and in order not to risk any problems with the platform or broker. It makes a lot of sense to test the services that you will be provided with a minimum deposit before transferring larger amounts in order to both avoid becoming stuck with a poor broker and to avoid any potential of a being scammed out of having your deposit returned.
  • Trade in proportion to your account regardless of the potentialRisk management is centered on preserving capital and the only way that this can be done is to limit the exposure of a trading account to losses. This is known as trading in proportion and it is an essential discipline which all successful traders have mastered. It involves deciding on a safe percentage of the account that a trader is willing to risk on any single trading position. Typically, professional traders risk no more than 2% on each position which allows them to endure multiple losses without depleting their account. For many new traders, this seems like a tiny and pointless amount but there are ways in which small trades of 2% can be very effective of a short amount of time. The temptation for traders to increase their exposure on trades that seem like a ‘no-brainer’, or dead certainty, is one of the mistakes made by all traders at some point. Since there is no such thing as certainty in trading it is essential for all new traders to manage their risk equally through all trades in any trading strategy. Not only does allowing the discretion to apply rules subjectively reduce the essential discipline of traders, but it also disturbs the monitoring of steady account growth. Many successful traders point out that removing emotion and trading mechanically is the secret to success. Risk management of stake size should not be an exception and proportionally small trades should be placed robotically and equally regardless of the potential success of the setup.
  • Using stop losses and leaving them aloneStop losses can be used by forex, spread betting and stock traders to limit the risk to a trading account. Placing a stop loss order in the market will close the trade when losses hit a certain threshold. This will signal that the trade has either failed or the financial risk is becoming too great for the account. Due to the fact that markets can reduce to zero and fly higher without limit means that without stop losses an entire trading account, and more, is potentially at risk. Stop losses are an excellent way to manage risk but they also need to be used properly. Many traders will place their stops at technical or ‘fail points’ where they are triggered if the trading decision is proven to be wrong. It is essential for successful risk management, however, that these levels are not altered during the course of the trade. The temptation to increase stop losses, and thus to increase financial losses, in the hope that the trade will eventually turn good is one of the easiest ways to deplete a trading account. Stop losses can also be used to ‘trail’ profits in order to prevent a positive trade suddenly turning negative and to help manage the success of a trade.
  • Resisting the desire to over tradeStarting to trade is exciting and all traders are at risk of trading, or wanting to trade, too much. This happens to everyone and both patience and discipline are required so that only those setups or strategies with the highest probability of success are traded. Continuously wanting to be involved in any market has its pitfalls including the potential for multiple losses. Many trading gurus point out that new trader’s should start by trading larger timeframes, such as the hourly or daily, to help limit trading before taking these acquired skills to the shorter intra-day timeframes including 5 minute charts and below. Opportunities occur on all timeframes and waiting for the optimum trade will both increase success and reduce the risks involved.
  • Holding positions overnightModern internet trading allows traders to make money 24 hours per day on a huge range of markets. However, this can be both potentially rewarding and equally damaging as these are difficult to monitor around the clock. Holding short-term positions during regular sleeping hours can expose new traders to unforeseen risk and shocks which may occur on the other side of the world. Particularly sensitive to this are commodities and currencies which operate on a 24 hour basis and which are highly sensitive to global news and data. Stocks are equally vulnerable to volatility for traders who hold positions overnight in anticipation of a continuation of a profitable session the following day. Being aware that holding short-term positions can be exposed to these risks and using stop losses to prevent over-exposure are important risk management strategies for these trades.
  • Find a broker and platform that suits your tradingWhilst many trading platforms offer similar products, they can and do vary in their suitability to the risk exposure of individual traders. From the markets available to trade to spreads, bonus conditions, contract expiry times, charting software, support and trade limits, platforms differ in what they offer their clients. It is important to begin small with any platform in order to mitigate the risk that it may not be entirely suitable for an individual trader. Thorough research prior to parting with any real money, and ideally the use of a demo account, will help to reduce the risk of any problems. Similarly, talking to other traders who use a platform can be particularly helpful in getting feedback on the experiences of others.

Binary options risk management

Risk management of all financial investments has a similar basis as has been outlined in the basic tenets above. However, binary options risk management is distinct in several ways which can benefit new or inexperienced traders looking to speculate on financial markets. We will look at these below in order to show how risk management can be practically applied to all binary options traders:

  • Limiting the first deposit in binary optionsAlmost all platforms will allow traders to limit their exposure by allowing a relatively low first deposit to be applied to new accounts. However, it is worth noting that some platforms offering bonuses with new deposits will require the trader to deposit larger subsequent amounts in order to be able to withdraw account funds. This has been seen as a problem with some platforms such as BancDeBinary and new traders are advised to make sure that they read the terms and conditions carefully before accepting such an offer. bot.192.168.1.143.xip.io, however, maintains both a low initial deposit and allows withdrawals to all traders without such complications and which makes it an excellent broker for those wanting to start trading binary options with lower risk.
  • Trading binary options in proportion to your account regardless of the potentialBinary options have the unique benefit of providing the trader with precisely how much he or she is set to gain or lose before the options are purchased. One the transaction is executed these levels cannot be altered and therefore the trader knows exactly the level of exposure that an account will be exposed to in cases where options close out-of-the-money. By taking on board the basic risk management strategy of limiting an account to just 2% of the value of that account, binary options traders can benefit from strict control over their trades and develop in to profitable traders. Furthermore, for those who think that 2% is too little, it is worth remembering that using this strategy will compound an account as it grows. An example of this is an account growing at, say, 1.5% for each successful trade then the subsequent risk of the next trade will also grow in financial terms whilst maintaining a 2% risk threshold. This can be explained with the example of a $1000 account with a $20 risk threshold which, over time, will grow in to a $2000 account with a risk threshold of $40 and an increasing profit value relative to this.
  • Using stop losses and leaving them aloneAnother great attribute that binary options have over other forms of financial speculation is that a stop loss is not necessary. This is particularly helpful for new traders who are already aware of the maximum risk that they can expose their accounts before purchasing any options. There is also no possibility to extend the stop loss and therefore the position cannot close out early for this reason. One of the distinct advantages of this is that a binary option can potentially close profitably and stress on traders is greatly reduced without market volatility increasing losses. SOM platforms also allow positions to be ‘rolled over’ or alternatively ‘closed early’ for a lower profit which can increase the chances of being consistently profitable.
  • Resisting the desire to overtrade and holding positions overnightUnfortunately, the same risk management is required for binary options traders in terms of limiting the temptation to overtrade. Binary options can be purchased with expiries of just sixty seconds so there are literally 86,400 opportunities to trade each day. Learning to be selective is the most effective way to limit risk and sticking to a tested strategy is also key to continued trading success. One benefit, however, of binary options in terms of holding positions overnight is that this is not a temptation if the expiry does not allow this. Although the same risks would apply to positions held overnight for any investment, binary options expiries can be set to close within just a matter of hours of minutes or hours to limit the temptation to hold these overnight. Additionally, because they do not rely on the degree of the price movements (only if it is higher or lower than the strike price), a sudden overnight rise or fall would not extend the losses already predetermined before the options were purchased.
  • Find a broker and platform that suits your tradingA suitable platform and broker are essential to binary options risk management. As already noted, some of these may not necessarily be operating in trader’s best interests and it is important to choose the one which will best suit individual styles of trading. Whether it is sixty second trading, range, touch or longer term options that are most appealing, finding a platform which can offer these is a good start to a long-term relationship. Furthermore, those platforms which offer little in the way of educational support and information will be those least suitable for any new trader. Binary options risk management will be hugely improved if the platform provides warnings and advice in regards to limiting financial exposure, especially to new traders.

Summary

Risk management is absolutely ssential for the success of all traders, regardless of the form of speculation being undertaken. All professionals, with track-records of success, will have risk management strategies in place (however basic) to prevent losses which may threaten their ability to trade. There are several basic risk management tenets which all new traders should focus on before jumping in to the markets expecting to be profitable. If these are observed the probability of becoming a successful and profitable trader increases exponentially. Among all forms of speculation and investment, binary options offers some distinct advantages to new and inexperienced traders in regards to risk management. The transparency and foresight of potential losses which binary options provide to all traders allow binary options risk to be managed highly effectively relative to other forms of trading.

Managing Risk, Losses, and Hedging Your Binary Trades

Whenever you deal with any type of financial trade, you need to understand not only how to make money – which is usually the purpose of getting involved with financial trading after all – but also learn about the best ways to manage losses. With binary trading, it is even more important to know about managing losses.This is because of the all or nothing nature of binary options. If you buy a binary option for $100 and it doesn’t expire in the money, then you have lost your $100 investment. In contrast, if you are investing in stocks and shares, and buy something at $100, even if the price drops you can still sell for $90 if you’re able to sell fairly early and do not want to hang onto something and wait for a potential recovery. Very rarely in other types of trading will you lose 100% of your investment if things go wrong. When you are binary option trading, however, it is a way of life. Managing risk successfully will put you in a position to make profits as often as possible, and means that you won’t regularly find yourself adopting your binary options strategy to account for losses and problems.The key phrase in all of this is “managing risk.” That is all you can do with it. There is no such thing as a risk free trading strategy that always guarantees a return. If there was, then everyone would be following it and everyone would be very well off!

Defining Risk

Before knowing your limits, you need to be clear on what the risk is; if you don’t know what you’re managing, how can you manage it? In terms of financial trading, we define risk as the probability of an unsuccessful result. Therefore, with binary trading, the risk is the likelihood that your option will expire out of the money, meaning you lose 100% of your investment. You are probably familiar with the term “riskeward.” This is a very important consideration to make when formulating a binary options strategy. Initially, a risk might appear to be one that is not worth taking. However, if the potential returns from a high-risk trade are better than they normally would be – some binary option trades can have returns of up to 500%, which would be a good example – then you might consider an increased level of risk to be acceptable. With most types of financial trading, the biggest returns from single trades usually come from those with the highest risk. Consider this when formulating binary options trading strategies. The most sensible approach is normally to take on lower risk for lower yet more assured rewards (remember, there are no guarantees), but you could always place a speculative trade from the profits you made from your regular strategy. Your approach to binary options trading will depend on your financial situation. Be prepared to adapt and evolve this should your finances change.

Determining Your Personal Strategy

The difference between binary option trading and other types of trade should also be considered. The biggest thing to keep in mind at all times is that if your binary option expires out of the money, you lose your whole investment. If you take out a high-risk investment elsewhere, you may lose money but you could also simply receive your initial capital back. Binary trading offers no such variables; you get the money or you don’t.If you are new to binary trading, a good approach to take is to look at your trades as a percentage of what you have. For example, if you are starting with a bank of $10,000, you might decide that 1% is the maximum you will stake on each trade, meaning $100 is your standard trade investment, which is a common minimum for binary trading platforms anyway. It is generally considered that anything at 5% or above is high-risk. Experienced traders will usually invest at 1 – 3% of their bank. Trading such sums means that you are not putting large percentages of your bank at risk.Remember that this is only one part of your binary options trading strategy. Determining how much you invest per trade is one element of the risk; you then need to look at the charts and determine whether the risk is worth it considering the market you are taking out a binary option on.

Buy Low, Sell High

Anyone who has shown any interest in trading of any kind will be aware of this mantra. Because you buy a binary option as an all or nothing trade, however, you should allow for further movement in the market. For example, say you are trading a particular commodity when the price is high. If you bought low, and the price continues to increase after selling, you might be annoyed at yourself but at least you have made a profit, which was your aim starting out. Likewise, if you buy low and the price continues to drop, you can manage the loss by selling to someone else looking to buy low.When trading binary options, it is harder to take a black and white buy low and sell high approach. There is no room for manoeuvre and no profit if a price continues to rise or fall. It is best when binary trading to pull back from this and await the establishment of upward or downward trendlines before making a decision.It is also worth avoiding breakouts during your early trades; when the price is stagnant and then suddenly shoots up, as they can just as quickly fall back and leave you with a loss.

Flexible Options Brokers: Benefits

Another method for managing risk is to find a binary options broker that offers some flexibility with your trades, specifically in the form of early exits or rollovers.

  • Early exits can allow you to “cut your losses” if a trade appears to be expiring out of the money. This moves away from the all or nothing nature of binary trades as you can still receive something back rather than lose 100% of your investment.
  • Rollovers allow you to lengthen the expiry time of your binary option. Typically given when options are expiring out of the money, some brokers will also offer higher returns should you extend when an option is in the money.

Early exits, in particular, should be considered by new binary traders, as they can be effective in managing losses if you are not yet totally comfortable with reading charts or spotting trends and patterns.Some brokers will also offer “out of the money refunds,” which are typically around 15%. Although not a huge sum, it is better than losing everything, and is definitely something worth looking out for.Another strategy for managing risk yourself is to consider hedging your binary trades.

What is Hedging?

You have probably heard the phrase “hedging your bets” used in some context or other during your lifetime. Although binary trading isn’t gambling, you can benefit from hedging, only in this context you are hedging your trades.To hedge a binary option, you need to buy a call or a put option before the end of an existing trade. For example, if you buy a call option, which is currently in the money, you can then buy a put option to expire at the same time, which will lock in at least part of the profit. Remember that you can’t hedge an option that is already out of the money, as you’ll just be increasing your losses.The biggest thing to understand with hedging is that you need to spend time working out how much you need to place on each trade in order to be profitable.Here’s an example of how you might hedge a trade:Asset: GooglePUT criteria: Below $150CALL criteria: Above $160Expiry: One hourThe above is an alert that you might receive through your binary trading platform. Say you’re trading at 1pm and after receiving the alert, you notice the price falls below $150, prompting you to buy the PUT option for $100 (or whatever sum your strategy dictates). Let’s say that this trade finishing in the money gives you an 80% return. At this point, you’re either going to make 80% profit or a total loss.Just before 2pm, your put option is in the money, but Google is showing as oversold and the price is starting to rise. You can then choose to hedge your trade by taking out a CALL option that finishes at the same time as your original PUT. If you buy the CALL option, which needs to be above a price lower than the original PUT criteria, you create a small opportunity to make a double return.For example, if the price is currently $145 and you buy a call option above $147, an expiry price of $147 – $150 will see you get the 80% return on both options, a total return of $360 ($160 profit).If this doesn’t happen, you will at least get a return of $180 (maybe more if your broker offers out of the money refunds), which reduces your overall loss to $20 instead of $100, which it would have been had Google continued to rise and expired out of the money without you buying the second option.

Should You Hedge Binary Options?

Although it is difficult to be profitable with binary hedging, it can be a useful way to increase returns and importantly, to limit losses. To be consistently profitable with hedging, you need to be an experienced trader who can recognize how the markets are moving. You need to be smart with binary hedging and recognize the opportunity to make extra money. Yes, it is a strategy you can use to limit losses, but you need to have the “double return” scenario in mind at all times, otherwise you’ll be losing up to $20, based on our example, every time you hedge.Hedging is not the simple binary options trading strategy many believe it to be – many use it but endure nothing but limited losses, yet somehow think they are being successful – and you will need to spend time building your knowledge of binary trading before following such a path.