Creating a unique trading system that will help you trade in the 1-minute time frame is a daunting task. Even the top traders in the United Kingdom often struggle to deal with such complicated setups. But do you know it is an easy job to trade the one-minute time frame when you take the trades in the options market? Options trading is a little different from your regular currency trading business. You will be using the expiry for the trades and the payout will act as your profit target.
So, how do you develop a perfect option trading method with some easy steps? Follow the steps in this article and you will be able to develop a perfect one-minute option trading system.
Determination of the trend
The first stage you need to go through to develop a one-minute trading strategy is the determination of the trend. Since you will depend on the lower time frame, you can’t take a trade against the trend. So, we need to jump to the daily time frame and look for the potential trend line. After finding the trend line in the daily time frame, you know whether you will go for the call option or the put option. A call option means buying the asset and the put option means selling the asset. So, learn to find the overall trend in the daily time frame so that you get a clear direction as to your trade setup.
Draw the SR levels
SR levels are nothing but support and resistance. The elite traders in the options trading industry always draw the SR levels in the one minute chart as it helps them to find the perfect entry point. They buy at the support and sell at the resistance. But taking the trades at the SR level without the help of the price action confirmation signal is going to be a risky task. For the safety of your capital, you should be following the basic price action pattern. Learning about the price action pattern might be challenging but we will make the process easier. Learn about the bullish and the bearish pin bar. The bullish bar should be spotted at the main support and the bearish pin bar at the resistance level.
Test your trading skills
Before you use this technique to trade with real money, you should be using the process in the demo account. When you take the trades in the demo account, you will be able to earn a decent amount of money. If you fail to make a profit in the demo environment, you don’t have the perfect system. You have to find the weakness in your trading method and fix the issues. Most people fail to make a profit since they never use the demo account to test their skills. For the safety of the trading capital, you should be using the demo account from the start as it will help you to earn a decent amount of money from the starting of your career.
Trade with low risk
People often get excited after learning to trade the options market with one-minute expiry. But getting excited is not the actions of a pro trader. You will be losing money most of the time when you take the trades in a very aggressive way. For safety, you should not risk more than 1% in each trade. When you start following the conservative method, you will slowly learn the perfect way to take the trades with low risk. This will boost your confidence and help you to earn most of the money. But make sure you never become emotional just because you have lost a few trades. Emotions should be controlled in every possible way. If required, you should take the day off as it will help you to improve your skills. You will have time to have a rethink about the edge.