The in between trading strategy is a primarily a 60 second trading, and as such, it can carry a large amount of risk along with it. When used properly it acts as a supplement to your normal trading strategy, slightly bumping up the amount of money that you will be earning. When used incorrectly, it will exaggerate your losses. This is why it is very important that you use the in between strategy correctly, knowing how to properly apply it and the drawbacks that come along with it.
Application is the Key
Before you begin using the in between trading strategy, you need to have a solid trading strategy already in place. Ideally, it should be a 15 minute to one-hour expiry focus, but that is not necessary for this to work. You can trade longer, or even shorter, expiries if desired, but the 15 to 60 minute window is perfect as it will give you the best setup for success.
The next step is to create a minute by minute candlestick chart of the asset in question. If you typically trade the EUR/USD, then you will execute your normal trades just as you typically would, but also have a second chart up, monitoring the smaller chart as well. Your goal here is to find inefficiencies in the 60 second chart in relation to the larger chart that you typically check on. For example, let’s say that you know that the euro is stronger over the next few hours than the dollar, but you are seeing the dollar making gains. This is where you can make in between trades. As the dollar gains more and more, the odds of a 60 second reversal become higher. When an inefficiency is discovered, initiate a 60 second trade. As long as you are correct 5 out of 9 times with this, you will gain an extra profit at most brokers.
Your goal with this is to add an extra opportunity for you to make money on an asset that you know very well already. You should already have an understanding of the short term movement of the asset, and when you add the ultra-short term into the mix, you will be able to more fully understand the moment by moment changes that are going on and then take advantage of them by adding a few extra trades into your day, and thus a few extra dollars in profits.
Drawbacks to Look Out For
There are several drawbacks to this strategy, the biggest being that 60 second trades are extremely risky. It is possible to be profitable with them, but they have a high degree of variance, which means that even the best traders will see swings up and down at times.
The next drawback that you will see here is the fact that your correct trade rate and your profit rate are going to go down. You are going to lose more often than usual when you introduce the in between trade strategy. For the most part, that’s okay. These numbers are ways to keep score on an even playing field when comparing your trading to that of others with larger or smaller accounts. Your concern, when it comes down to it, is strictly making money. When used correctly, you can go from making $10,000 a year in binary options trading to $12,000, or from $100 a month to $120. You get the idea. At the same time, your correct trade rate might drop from 65 percent down to 62 percent. That is the nature of this strategy, and many traders are uncomfortable with this. If you fall into that category, then don’t use this strategy.
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