3 Dangers of Trading 30 Second Binary Options

“If I invest 10% of my $250 binary options account in 30-second options, I can make $25 every half minute! In one minute, that’s $50. In five minutes, that’s $250. I’ll have doubled my account! By the end of the day, I could be rich!”

Those are the kinds of thoughts that typically cross a newbie trader’s mind when he finds out about a new type of trading. If you haven’t spent at least a little time calculating just how fast you could strike gold and never work again, you are an outlier. Almost everybody gets caught up in these calculations. And to some extent, that’s okay. It can be very encouraging to know it is possible to do well trading. But you do need to be realistic. There are a lot of problems with the calculations above. While they may add up, real life is never that clean and neat.

In real life …

… You will lose trades. This is a guarantee. There is no such thing as a perfect win percentage. You may be able to achieve a high winning percentage, but you are always risking money.

… You will need to set more reasonable limits on how much you trade. Ten percent is just too much. Do you really want to blow through your account in just 10 trades?

… Your trades will not fall back to back like the trader above is calculating. It could be hours between good trades. In some cases, it might be even longer. You could go days without finding a top notch setup.

… Quickly, you will find out that 30-second trades offer a unique set of challenges, which can be dangerous if you do not regard them with the respect they deserve. For that reason, most traders will do better if they start out with longer term trades which last a few hours or days, and then work their way up to fast binary options.

Here are some of the unique challenges which are imposed by 30-second binary options. These challenges apply equally well to 60-second options and other fast options which last just a couple of minutes.

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80% $5 $1
 
80% - 90% $250 $5
 
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95% $250 $1
 
80% $10 $0.10
 
160% - 180% $50 $2
 
95% $250 $1
 
90% $250 $1
 
80% - 90% $250 $5
 
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200% $50 $10
 
95% $250 $1
 
90% $50 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
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  90% $10 $1
 
  200% $50 $10
 
  85% $200 $20
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
200% $50 $10
 
85% $50 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
85% $10 $1
 
80% $5 $1
 
80% - 90% $250 $5
 
80% $250 $25
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
90% $50 $1
 
85% $100 $5
 
85% $10 $1
 
85% $50 $1
 
85% $200 $20
 
95% $250 $1
 
80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  95% $250 $1
 
  85% $200 $20
 
  85% $10 $1
 
  85% $100 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $100 $5
 
  85% $10 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
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  90% $10 $1
 
  85% $50 $1
 
  90% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
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  90% $10 $1
 
  85% $10 $1
 
  85% $50 $1
 
  95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
90% $10 $1
 
85% $200 $20
 
85% $100 $5
 
95% $250 $1
 
80% - 90% $250 $5
 
85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  85% $100 $5
 
  85% $50 $1
 
  85% $10 $1
 
  95% $250 $1
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  90% $10 $1
 
  200% $50 $10
 
  85% $250 $10
 
  85% $50 $1
 
  85% $100 $5
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
200% $50 $10
 
95% $250 $1
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  200% $50 $10
 
  85% $250 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  85% $250 $5  
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
  85% $50 $1
 
  200% $50 $10
 
  85% $200 $20
 
  95% $250 $1
 
  85% $100 $5
 
  85% $10 $1
 
  80% - 90% $250 $5
 
  80% $250 $25
 
Broker reviews Blacklist rating Trade now Early expiry Avg returns Min deposits Min trade Ratings Trade now
95% $250 $1
 
85% $10 $1
 
80% - 90% $250 $5
 
85% $50 $1
 

 

1. Volatile markets and unreliable data

No matter how fast a thinker you are, and no matter how quickly you can place a trade, there are some factors which are out of your control, and which can impact your trading adversely. Some traders avoid fast options outright for just this reason. The data you base these trades off of is generally less reliable. Why? When you look at a chart with candles which each represent an hour, there is an hour’s worth of data in each candle. But if you are basing trades off of the one minute charts, each candle is only a minute’s worth of data. Not only that, but there is a lot more choppiness on these lower levels, and that means more fakeouts. Can you steer around these obstacles for success? It can be done, and some traders are great at it. It is important not to go into 30-second trading blindly though; know the terrain and you will have a much better chance at navigating it safely, even if that takes some extra preparation work. Is it a fake-out or break out? Find out.

2. Lots of pressure

Fast trades and slow trades each pose different psychological difficulties for traders as well. You may or may not find yourself suited to trading 30-second options. For many, they simply are too fast. If you fret when you have to make fast decisions, you may not make smart decisions. You could compromise your own judgment with panic. Frantic to avoid missing a trade, you might start taking trades which are not “A setups,” but instead are “B” or “C” setups. Not everyone can confidently make a correct judgment about a trade that fast. Another possibility is that you will skip trades because of a lapse in confidence that you actually should be taking.

That same pressure can certainly come into play even when you are doing slower trades. For some traders that may be even worse. They may end up second guessing themselves precisely because they have so much time on their hands. It might seem like too much time. Those traders may actually do better trading faster options, because they may find that the faster trades fit their psychology better. The bottom line here is to figure out what kind of trader you are, and trade accordingly. 30-second options may be too fast for you, or they may be ideal for you.

3. Less time to correct your mistakes

Probably the biggest danger of trading 30-second options and other fast options is that they blaze by so quickly you may not realize that there is something wrong until it is too late. Picture this example:

Cathy is trading 30-second binary options. Her first few trades go well, but her next trade is a loss. Eager to “get back at the market,” and sure that this loss was a fluke, she places a second trade, and loses again. Surprised, but still sure that this is part of a normal losing streak, she makes another trade a few minutes later, only to lose this one. On each of her trades, she was investing 5%, so she has had a 15% drawdown of her account within just several minutes.

Nonetheless, there were times that she lost this many trades while testing, so she assumes the losing streak will now end. Her next trade is another loss, so now her drawdown is 20%, and only about fifteen minutes have gone by since the entire mess started. Can you picture losing a fifth of your account in just fifteen minutes?

If Cathy continues to blow through her account at this rate, she could lose the entire thing in less than two hours. If she had been taking slower trades, she might have had more time to think about what was going wrong before she lost this many trades. She might have picked up on mistakes that she was making. Perhaps Cathy has been taking setups in the wrong market context, or she has been misinterpreting the signals her system has been sending her. Either way, she can pull out of the market and go back to demo testing to try and figure it out, but you can see how fast trades predispose traders into losing more money than they need to in order to identify a problem. Trading fast is addicting, and it is easy to lose control and succumb to the emotions of the moment. Cathy may want to check out benefits of longer trades.

In Cathy’s case, the emotions included fear and anger. You cannot really get revenge on the market, but the thought that you could “get it all back” in just a couple of minutes can be almost irresistible. When you think that way though, you make it far more likely you will lose everything you have just as quickly.

Get control of your emotions – click here.

The Dangers of Trading are Avoidable

Hopefully you have not been too discouraged by the cautionary notes discussed above. You may have noticed that none of the problems listed are unavoidable if you approach trading with the right frame of mind, clear vision, and an understanding of the pitfalls. 30-second trading is not right for everybody, but there are some traders who will do better with fast trading than any other type—and you could very well be one of them. Especially if you have a busy schedule – see why.

This is where most articles you read would say, “The only way to find out is to try!” I will say the same thing, but with one special addendum: “Without trading real money.” There are very few times in life that you have the opportunity to try something new with absolutely no risk, but you are looking at one of them. With binary options trading, you can test your trades on historical charts, and then you can test them in real time using live, streaming data on a demo test platform. You do not have to spend one penny of your money learning how to trade. After you are showing regular, reliable profits in your demo account, you can start trading with real currency. Find out if fast options are right for you, and then start making fast profits!

Since 30 second trades are still so new there is little “evidence” to back up their success. However this video may give some insight: