Trading five minute binaries work just as good as a two hour binary but they can create havoc for a new trader. Why? Because the new trader has many skills to learn including deciphering the charts, discipline and money management.
Trading Five Minute Binaries – USD/JPY Example
Here is a five minute binary that was executed this morning. The binary had a total risk of $40 and expired “In the Money” resulting in a $60 profit. Now let’s look at the differences with the five minute binaries versus a two hour binary.
Three hundred — that is the number of seconds that a new trader has in the trade. While 300 seconds may seem like a lot, when you are analyzing a chart for the first time, but going thru the steps, it is quite a short time span. Plus, the pricing premiums are jumping around like crazy. Every tick of the clock can make the binary prices change dramatically. New traders, quite often, are still trying to learn the platform and adding the pressure of a five minute binary simply creates more stress.
Additionally, most new traders are still working on a plan or method that works. Then they choose a five minute to implement what think may work. There’s really not a lot of time available for “thinking through” the trade or capturing the screenshots on entry and exit. Without this information, it is very hard for the trader to produce the documentation to gauge how well they are performing.
New traders should take advantage of the two hour binaries. Two hour binaries provide more time for a new trader to make decisions without feeling the pressure of an expiration in just a few seconds. After perfecting their timing and building the skills they need, they always have the option of switching to five minute binaries later.
Exchange fees not included
Nadex Risk Disclaimer
- Trading on Nadex involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Any trading decisions that you make are solely your responsibility. Past performance is not indicative of future results. Nadex instruments include forex, stock indexes, commodity futures, and economic events.
- Nadex binary options and spreads can be volatile and investors risk losing their investment on any given transaction. However, the limited-risk nature of Nadex contracts ensures investors cannot lose more than the cost to enter the transaction. Nadex is subject to U.S. regulatory oversight by the CFTC.