Short Time Frames

Short Time FramesBy trading short time frames you can earn the best return possible on binary options. Whereas most strategies are not well suited for time frames there are exceptions.

In this article we will tell how you can trade short time frames and make an impressive profit.

What makes short time frames so special?

Short time frames are special. You cannot easily apply most standard strategies when investing in short time frames. Rather, you need a specialized strategy, or at the very least, to adapt the strategy you are already using, in order to successfully trade short time frames.

The big challenge inherent in short time frames is that the market is erratic. It changes direction frequently and rapidly. This is accentuated within short time frames. Most strategies will not react quickly enough in order to deal with this. As a result, they fail to respond to good trading opportunities and generate invalid signals.

Fortunately, you can adapt your strategy to work better within short time frames. Here are three helpful pointers:

 

1) Trust leading indicators

A leading indicator is used to predict market movements in advance, before they actually happen. This type of indicator, such as oscillators, searches for weakening movements in an attempt to predict when the market will turn. Within short expiration time frames the market moves more erratically and turns more frequently than within long time frames. This makes leading indicators ideally suited to tell you what is about to happen next. Always use leading indicators to ensure your strategy will succeed on short time frames.

The opposite of a leading indicator is a lagging indicator. They indicate movements in the market that have already happened. Lagging indicators are especially useful when it comes to identifying trends. This is not of interest within short time frames where movements are too erratic for trends to form. Lagging indicators do not work well on short expiration time frames as they are simply not intended for such use, and will end up generating unhelpful readings.

2) Rely on simple candlestick formations

You can use candlestick formations to make predictions about future price movements also in short time frames where things move fast.

This is especially true for simple candlestick formations. They often consist of only one candlestick, sometimes 2 or 3. Because they are so basic, they are able to form – and show you relevant information quickly enough – even in a fast-paced, hectic environment.

As you might already be aware, formations that consist of such a small number of candlesticks are only able to foresee events that will occur within a short expiration time frame. You cannot use simple candlestick formations to make long-term predictions. This means that you can use them to make money in short time frames by keeping your options’ expiration times short. Be on the lookout for simple candlestick formations, and invest in accordance with what they tell you as quickly as possible.

3) Use short expiration times for your binary options

It is of fundamental importance that you invest only in binary options with very short expiration times if you are to trade short time frames profitably. This is because any prediction you make within short time frames will only be true for a few moments. You need to strike while the iron is hot, and you have to use short expiration times so that the movement you foresaw doesn’t end before your option expires.

The great thing about trading on short time frames is that you avoid a big challenge you face when trading on longer time frames. Usually, short expiry times are vulnerable to short lived, random price movements. They can come along and scupper a trade even if you made the right prediction overall. Within shorter time frames, it is these short lived, random price movements you are trading on. In other words, they cannot sabotage your investment as with options with longer expiry times.

When trading short time frames you simply respond as soon as you foresee an upcoming movement in any given direction. You invest in a corresponding option, and choose the shortest expiry time you can. Only seconds later, you will have made money on another successful binary trade.

Short Time Frames
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