1-Hour Binary Options
As the name suggests, 1-hour binary options expire after 60 minutes. This short-term contract is popular with retail investors looking to make straightforward predictions on stocks, forex, commodities and cryptos.
This trading tutorial explains how 1-hour binary options work with examples. We also list the top supporting brokers and cover strategy tips for beginners.
1-Hour Binary Options Explained
Binary options are a high-risk/high-reward form of trading. An investor predicts the price movement of a particular asset, such as a stock. If their prediction comes true, they win a predefined amount of money. If their prediction is wrong, they lose their initial stake. In essence, binaries are a form of financial betting where risks and returns are known beforehand.
1-hour binary options are simply contracts that expire after 60 minutes. They are popular because investors can take multiple positions throughout the day, meaning winnings can be reinvested. 1-hour binaries are also provided by many leading trading brokers.
The best way to understand how 1-hour binary options work is by looking at an example…
Let’s say that a trader believes the value of gold will rise because they anticipate an increase in inflation which will lead to investors using the precious metal as a hedging instrument. With a news announcement from the central bank looming, they anticipate that the value of gold will exceed the current market value of $60. The trader takes out a 1-hour high/low binary options contract with a payout of 75%. They stake $100 on the prediction.
30 minutes later the central bank announces a higher than anticipated rate of inflation which leads to the value of 1 troy ounce of gold climbing to $62.50. By the 1-hour expiry, the price is $65. This means the contract finishes ‘in the money’ and the investor receives $175 ($100 deposit + $75 payout).
Note, if the prediction had been incorrect and the price of gold had fallen below $60 after the 1-hour, the trader would have lost their $100 stake.
Investors will need to decide which type of binary options contract they want to purchase. Each product below can be used when trading 1-hour binary options and will ultimately depend on personal preference, asset type and potential payout.
- High/Low (Up/Down) – This is the most popular type of binary option. Investors predict whether the price of a security will trade above or below the current market price after 1-hour.
- Touch/No Touch (One Touch) – Traders predict whether the market will reach/hit a set target price. If it hits that price within the hour, you finish ‘in the money’. Importantly, the market does not have to remain at that target price at the end of the 60 minutes, you win if it simply touches it. You can also take out no-touch contracts.
- In/Out (Boundary or Range) – A high and low price point is set and traders predict whether the market will finish within or outside of the range at the end of the hour. This is the only type of binary option where two target prices of equal distance are set, and you do not have to predict the direction of movement.
- Ladder – This type of contract usually has five or six target prices. You predict whether the market will be trading above or below each of these prices when the hour is up. Each rung essentially behaves like a high/low option – the target price just gets further away each time you move up or down the ladder with potential payouts also increasing. This type of option allows you to combine riskier, high payout predictions with less risky forecasts.
Benefits Of 1-Hour Binary Options
Advantages of investing in 1-hour binary options include:
- Easy to understand for beginners
- Available on a wide range of popular markets
- Investors can purchase multiple contracts at a time
- Traders can invest and reinvest multiple times throughout a day
- Large payouts are available at the top brokers, especially with ladder options
Risks Of 1-Hour Binary Options
There are also some downsides to trading 1-hour binary options:
- Binary options trading is heavily restricted in some countries
- More than half of traders lose money in their first year
- No guarantee of profits
1-Hour Binary Options Strategies
Successful traders follow a plan rather than wild speculation. To help you get started, we have listed some key tips and considerations.
Technical traders use charts and indicators to identify patterns and make pricing predictions. A candlestick chart is a good place to start for beginners. The wide part of the candlestick displays the opening and closing prices while the thin part of the candlestick shows the highest and lowest prices over a set period. Investors can then employ technical indicators to drill down into trends:
- Triple Moving Average Crossover – This is a bullish signal, indicating that the price of an asset may rise. It is straightforward to use and overlay onto charts. It will also suit traders with less time.
- Relative Strength Index (RSI) – The RSI indicates whether a market is overbought or oversold. It provides a number between 0-100 where anything over 70 is overbought and anything under 30 is oversold. This can be useful for identifying reversals.
- ATR and ADX – The Average True Range (ATR) and Average Directional Index (ADX) predict the range and direction of price movements, respectively. Together, they can be used to predict whether the market will reach a target price. These indicators tend to generate a lot of signals.
- Money Flow Index (MFI) – The MFI is a momentum indicator. It is similar to the RSI but with the addition of considering volume as opposed to just price. It can be used to indicate that a market has limited room to rise or fall beyond current levels. This will create many signals over a short period and is best used in conjunction with other indicators.
Importantly, indicators often suit different time frames and the best binary options trading windows and hours. The Triple Moving Average Crossover indicator, for example, works best with a time frame of 1 to 5 minutes. Alternatively, the Money Flow Index (MFI) works best with a time frame of 5 to 10 minutes. When trading 1-hour binary options, you may want to use multiple charts, indicators and time frames to inform your forecasts.
We have also compiled a list of tips and tricks to take into account when trading 1-hour binary options:
- Follow a plan and don’t let emotions interfere with the decision-making process
- Do not risk more than 1% of your total capital on an individual trade
- Use free demo accounts to test and refine strategies
- Do not frantically try to win back losses
- Utilize signals from trusted brokers
Final Word On 1-Hour Binary Options
1-hour binary options can be used to make straightforward predictions on stocks, forex, precious metals, energies and digital assets. Potential returns and risks are known upfront while many of the top brokers offer a range of binary options contract types. Use this tutorial to open a trading account today.
What Are 1-Hour Binary Options?
1-hour binary options are a derivative with an expiry time of 60 minutes. They are fast-paced and high-risk but can result in big profits if traded effectively.
Can You Trade 1-Hour Binary Options 24/7?
Yes, you can trade binary options 24/7. However, certain assets may only be available when their respective exchanges are open, for example, stock indices. 1-hour binary options are offered 24/5 by the best online brokers.
How Many 1-Hour Binary Options Trades Can You Do Per Day?
There is no limit to how many 1-hour binary options trades you can make a day. With that said, beginners should start small and then take out more positions as they build up their confidence.
Which Binary Options Broker Should I Use?
There is a long list of potential platforms. When choosing a provider, consider binary options contract types, payouts, signals, customer support, plus deposit and withdrawal options. Also make sure they offer access to the markets you wish to speculate on, such as currencies. You can find the top brokers for trading 1-hour binary options here.