60 Seconds Binary Options
60 seconds binary options are controversial in the eyes of many seasoned traders including ourselves. However, due to the great demand for such strategies in the binary options market we have crafted a unique trading strategy that is designed for such expirations.
This technique was developed by our senior analyst based on the market experience the financial sector. If you are new to binary options trading we strongly recommend you will read our binary options trading guide before proceeding to the strategy.
Many binary options brokers offer 60 seconds expiries in currency pairs so the Forex market will be our prime focus for the strategy. Before head-diving into the technique, it is important to realize not every currency pair is alike and we are not referring to the payout.
Certain currency pairs are more volatile by nature than others. EURUSD for example is not as volatile as EURJPY. Volatility is extremely crucial in trading binary options with a 60 seconds expiration. We have categorized for you the most popular pairs by their volatility level based on our trading experience,
EURCHF, EURGBP, AUDCAD, USDCAD and AUDCHF.
EURUSD, GBPUSD, AUDUSD, USDJPY, CADJPY, GBPCHF, USDCHF, AUDJPY, NZDJPY and NZDUSD,
GBPJPY, EURJPY, GBPNZD, EURNZD, EURCAD, GBPCAD, GBPAUD and EURAUD.
USDRUB, EURHUF, USDHUF, USDZAR, EURNOK, USDNOK, USDTRY, EURTRY and Gold (Gold is a commodity but is also available under 60 seconds expirations).
Selecting the Currency Pairs
Based on our exclusive trading strategy, which we will soon discuss, high and extreme volatility may be unsuitable. As great as it may sound, the volatility is likely to act against you in the long-run (after 300 trades for example) due to the narrow window that is given to earn the payout.
The price could very well hover around your target price (entry price of the binary option) before trading in your predicted direction. However, as odd as it may sound, currency crosses such as GBPJPY and EURNZD may be appropriate for 30 seconds expirations but a different strategy must be applied.
We will release our 30 seconds strategy in due date. Reverting to the 60 seconds strategy, we find low and medium volatility pairs to posses the optimum conditions for our trading strategy. We are calling it the “Relative Analytical Binary Intermediate System” or RABIS for short.
RABIS 60 Seconds Trading Strategy
We will repeat that the strategy is designed for traders that understand the basics of support and resistance levels. If you are new to the market we recommend you will read our binary options trading guide at the top of this page where we do explain how to use support and resistance levels.
Many traders perceive the idea that in order to trade 60 seconds binary options a 1 minute chart is required for thee analysis. Please be aware that 1 minute charts, especially with forex trading is enriched with false signals no matter what is your trading strategy.
Many traders in the spot Forex market are also avoiding 1 minute charts for that same reason. If you have traded forex before we are certain you already know the outcome of such strategies. To produce what is referred to as a quality entry multiple time frames are required. The monthly, weekly, daily and 4hr charts are irrelevant for the strategy. The prime focus is on 1 hour and 30 minutes charts.
EURGBP 30 Minutes Chart
Please click on the chart to enlarge:
Each candlestick is equivalent to a 30 minutes time frame. For example, the candlestick opens at 14:00, closes at 14:30 and a new candlestick begins.
The Relative Analytical Binary Intermediate System (RABIS) aims to produce just one quality signal using support and resistance levels. The 30 minutes chart shows the support (in green, 0.7894) and resistance (in blue, 0.7901) in EURGBP. The focus will be on the third time the market price re-tests (reaches again) the support or resistance. It is difficult to see it clearly on the 30 minutes chart so we will move to a 15min time frame.
EURGBP 15 Minutes chart
Please click on the chart to enlarge:
Each candlestick is equivalent to a 15 minutes time frame. For example, the candlestick opens at 14:00, closes at 14:15 and a new candlestick begins.
The 15min chart shows the resistance being tested on multiple occasions (blue arrow) and clearly see the third attempt at the resistance (orange arrow). This is the candlestick where RABIS will provide an entry. Remember that the expiration is just 60 seconds. Executing a trade on the 15min chart where each fraction of a pip counts in a very short period of time bears many risks. Now that we know when the third re-test took place we will explore the 5min chart.
EURGBP 5 Minutes Chart
Please click on the chart to enlarge:
Each candlestick is equivalent to a 5 minutes time frame. For example, the candlestick opens at 14:00, closes at 14:05 and a new candlestick begins.
From the chart above we can see how on third re-test of the resistance level the price retraced lower. As great it may appear, do recall the binary option’s expiration is just 60 seconds. We cannot time our entry on the 5 minutes with such a short expiration. In order time our technical entry we proceed to the 1 minute chart.
EURGBP 1 Minutes Chart
Please click on the chart to enlarge:
Each candlestick is equivalent to a 1 minute time frame. For example, the candlestick opens at 14:00, closes at 14:01 and a new candlestick begins.
From the one minute chart we can clearly note the third re-test of the market before reversing lower in the next candlestick. The entry is not as simple as it may appear. On this occasion the weakness began after the candlestick closed at the resistance level.
On many occasions it won’t. The entry would be at least 30 seconds into candlestick that is testing the resistance and less than 50 seconds. It would be difficult to express in several words why this is required, see it as a golden rule for the RABIS strategy. If the candlestick only test the resistance in its last seconds a longer expiration may be required such as 2 minutes but not 60 seconds.
Once the trade expires in the money the currency pair will not longer be traded if there will be more re-tests to the resistance until a new resistance is provided. This will happen when the price breaks above the resistance or below the support.
In our example we focused on the resistance level, which means put or low binary options. The same concept applies when the market tests the support level (trading call or high options. There are guidelines for the Relative Analytical Intermediate System (RABIS).
Upon a break above the resistance, if the market re-test the breached resistance, which now acts as a support level within 5 candlesticks a call option will not be executed. If the market does re-test the breached resistance from above after 5 candlesticks, it will be considered as the first test. If a third re-test is noted, a call binary option may be considered via a 60 seconds expiration.
For general reference, the forex rates, unlike stocks, do not originate from one source. The FX rates (also known as quotes) come from the interbank exchange rate so it is very likely banks will offer different rates with a minor deviation. It is therefore very likely you will have a different price for the currency pairs in your binary options account then what is shown on the charts.
It is not critical as if your broker is providing the real market price, when the currency pair will decline it will also reflect in your trading platform. Other reasons for the price differential is risk management steps taken by the broker that we do not wish to elaborate on at this research as it does not affect the strategy.
Capitalizing Over Barrier Options
There is an alternative to support and resistance levels that are used in RABIS although we highlight using technical analysis does have its advantages. The Forex market is filled with option barriers.
There are many types of option barriers such as Double No Touch (DNT) but most have the same fundamental rule, the price level of currency pair that was selected must be not be reached by the market until the expiration, which is called the New York (NY) cut at 15:00 GMT. The option barriers are not based on 60 seconds or End of Day expirations and are worth millions of dollars, sometimes even billions.
In order to protect the barrier option, the investor will layer entry orders just beneath the option’s price to prevent the market from triggering a loss to the trade.
For example, if a barrier option is held in EURUSD, worth $800 million at 1.2370 and the market is at 1.2790 (the price is below the market price), the investor would place entry orders to buy EURUSD anywhere between 1.2375 – 1.2380 to prevent the marker from reaching 1.2370 that would nullify the option. If the marker nears 1.2375 – 1.2380 the entry orders will be triggered and shove the price higher.
This is the moment binary options trader may look to initiate call (high) 60 seconds trades. The same applies for put options if the barrier option is above the market and the price nears the barrier before the NY cut.
An barrier option above $700 million is likely to be heavily protected. Of course, support and resistance levels should still be used. Focus on these levels throughout the day and make a note when the market nears them.
The Trading Sessions
There are three types of trading sessions, the European session, the US session and the Asian session. The European session begins at 07:00am GMT and ends at 16:00 GMT. It is considered a volatile session for most currencies in the Forex market.
The US session initiates at 13:00 GMT and ends at 20:00 GMT. It is no less volatile than the European session due to economic data that is often released at 13:30 GMT.
The Asian session begins at 23:00 GMT and ends at 08:00am GMT. It is considered to have the least volatility although attention should be paid to economic data that is released from China and Australia that are often released in the Asian session.
Volatility may harm the strategy so it is essential not to place trades minutes before a key economic figure. Although the sessions themselves do not negate the RABIS, the Asian session appears to provide optimum conditions. We would also suggest to explore the gap between the US session and the Asian session (20:15 GMT – 22:50 GMT) for trading binary options in general.
Our 60 seconds trading strategy is not bulletproof. As any trading strategy it cannot succeed on every trade. There will be times when the market will break above the resistance or below the support, which is why risk management is extremely important.
We would also like to highlight binary options trading is not suitable for everyone as any other financial market. You are welcome to test the Relative Analytical Binary Intermediate System (RABIS), which we hope will assist you in trading the market. Always ensure you trading with a regulated binary broker, preferably by Cyprus Securities and Exchange Commission (CySec).
May 2017 UPDATE: We launched our very own binary options trade alerts (signals).
Last Updated on May 27, 2017