Samuel Leach, Founder and MD of Samuel & Co. Trading
What can you do in 60 seconds? Most things, even the most basic, are off the table. You’d be hard pressed to brush your teeth, make a cup of tea, or get through a page of your favourite book. Yet, surprisingly, just a minute is long enough to make money through a single successful trade on the Forex market.
The fundamental premise of the 60 second trade is very simple – take advantage of extremes in the market to make a profit. The key to doing this is understanding how market fluctuations work.
Take a lift as an example – the market is the building, the lift is the fluctuations, and the floors you enter and get out at represent your trade. The higher the lift goes the more likely it is to come down, the lower it is the more likely it will go up. In both cases it will eventually revert to the middle floor. In our analogy the middle floor is the mean, the top floor is Rising 3 (R3) and the bottom level is Support 3(S3). When the market is at either the R3 or S3 extreme there is an 83 per cent chance it won’t break through and go further up or down, and will instead change direction. This is a pivotal point (PP), and where the opportunity for the trader lies.
When a PP is identified you can be confident that if you enter the lift and go in the opposite direction to everyone else (i.e. selling if everyone is buying, or buying when everyone is selling) you can get out 60 seconds later at a floor that’s more profitable than the one you entered at, as it’s closer to the mean.
Identifying and acting on PPs in the market in time is a challenge– if you’re not paying attention at the precise minute of the surge, you’ll miss it. As such, it’s a tactic that requires practice and an ability to handle the high-energy, fast paced environment. However, once this is mastered the strategy provides significant benefits.
The short-length of the trade makes it a solid way of generating quick wins, which is ideal for those who can’t or don’t want to have their capital wrapped up in the market for a long period of time. Furthermore, getting out fast means you require a far smaller stop loss (an order to automatically close the trade when a certain amount of loss has been reached) than in traditional forms of trading. This means you can get involved with significantly less capital, which increases accessibility and, when used appropriately, reduces your chances of making a significant financial loss.
Not only does the strategy give you financial flexibility, it also provides a far less strenuous and emotional experience than other forms of trading. You don’t need to constantly monitor the news and understand how events will influence the markets, as you’re not in the trade long enough for the global socio-political and business environment to shift significantly. This reduces stress caused by attachment to the trade and makes it suitable for those who don’t want to focus on the markets all day, possibly as trading isn’t their full-time job.
In relation to this, 60 second trading is perfect for those who want to trade but only begin doing so later in the day. The markets will only become volatile, and therefore suitable for the strategy, after 10/11.00a.m. when New York and London are both in play.
The one-minute strategy isn’t for the faint hearted. It requires the ability to identify PP’s and act within a split second to take advantage of market extremes. This can make it exhausting if used as your sole trading strategy. However, if used appropriately, it can open the door to significant profits without many of the challenges that traditional trading poses; it doesn’t require significant financial resource or tie up funds, you can choose to have flexible working hours, and you don’t need to monitor the news and understand how it will influence the markets. With all of this in mind, it’s well worth giving it a go, after all, it’ll only take 60 seconds.
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