Forex Scalping and 60 Second Binary Options

Scalping is a very short term method for trading the markets with the quick opening and liquidation of positions several times during a trading session. Most scalpers will maintain their positions for 1-2 minutes on average, making small profits over a long period of time, which can reach significant amounts when combined. Scalping offers more opportunity on non-volatile days, as well as the ability not to worry about overall market direction; we all know how tough it is to call the markets. The key to success here, is to be able to predict volatility and lack of volatility, or simply the absence of a trend in the market.

These days, most successful scalpers move their trading from the spot Forex market to 60 second Binary Options, using techniques that were originally developed for scalping to make short term market predictions. Scalping in the spot Forex market offers profits of limited magnitude, while profit on a similar successful binary option trade can be up to 90% per trade, therefore there's not much point using the spot market. On the downside, binary options have expiry times, whereas the spot market doesn't have this restriction, but deep down this is not a real problem as you can always open several positions, and the advantage of risking fixed amounts as opposed to taking big risks in spot trading makes the case in strong favor of binary options scalping.

Make sure you Scalp the Markets without risk of a Breakout

To achieve this, many scalpers use the Average Directional Index indicator or ADX, to ensure they stay in the market only as long as necessary, and only as long as the indicator reads 30 or less, or even better 25 or less. As you can see on the chart below, the ADX index stayed below the reading of 25 for a long time, notice this is a 30 minute chart, each bar represents 30 minutes of trading which is a long time in the markets! This would have been the safest period to scalp this market, using one minute binary options.

Binary option traders have little to lose should they decide to trade outside this safe zone, but why bother when you can trade the best. Each binary trade lasts up to 60 seconds and offers a substuntial return, now the beauty of scalping is the high frequency of trades and huge number of winners. Serious scalpers make $100s per day trading like this, trading the 60 second binary options alone, while others extend their scalping to several minutes. Either way, it can be done. It really is possible to make $100s in profits from these few 30 minute bars you see on the above chart!

Remember that just 5 bars, works out to 30mins x 5 = 150 minutes of perfect quiet market time, where the market still moves but only marginally. The 60 second binary option can allow you to fade the market, that is buy the market when it drops too much, and sell the market when it rallies too much within this tight range. Considering only 60 trades, trading $20 at each trade, winning 45 out of 60, losing the other 15 (worst case scenario), and a payout of 70%. The trading session would yield 45x$20x1,7 = $1530, and losses would be 15 x $20 = $300, net profit would be $1230 for the scalping trading day. This is possible only with careful selection of the scalping trading day and specific hours, with some trading skill, and only through binary options. Try to scalp using spot market trading and losses will surprise you, just one trade going out of control and you give up $100s of profits.

Make Sure the Expiry Time Covers the Duration of your Trades

With binary options your only risk is in the timing; you have to get the timing right. With 60 second binary options in particular, you might want to focus on market moves that take less than 40 or 30 seconds to complete, this way the odds of winning more trades increase substantially. New traders tend to be wrong on the timing, and many of their expected market moves end up taking much longer to complete, this is where they lose most often. But you can fix this with careful preparation and longer expiry times, ones that fit the specific volatility of that specific day. Go beyond 60 seconds if you have to, and if the conditions are right, expect many profitable trades, possibly more than the next day will bring, so don't hesitate. Remember not all trading days are suitable for scalping.

Finally, there are no special directional indicators in scalping, some traders use such indicators but as long as the market remains trendless, all you really need to watch are the recent highs and lows, so as to establish an approximate range for buying your Call and Put options.

Next: Predicting Price Movement in Binary Options