Best Time to Trade Binary Options

Best Time to Trade Binary Options

Submitted by adil on Tue, 06/10/2014 - 10:01

So What's the Best Time to Trade?

One factor that only an experienced trader knows is the time to trade the options. A beginner can never figure out the best time because it is not every second of the day that is favorable for trading binary options. However, there are times when a trader gets an opportunity to place successful trades from their money. This is all about binary options tips which help traders to identify the best time to place profitable trades.

So What is the Most Suitable Time for Trading Binary Options?

When you are trading binary options, it means you are trading multiple assets, such as, currencies, indices, commodities, and stocks. Once the market closes or the trading period lapses, you generate return on the basis of final prices of the assets. It shows that a trader foretells the direction of the asset price. There are certain assets, such as, currencies, indices, and commodities, which are traded in a time span of twenty four hours. However, when it comes to the stock market, the time to trade stocks is determined the trading hours of the market. Therefore, you are required to observe the time zone of the stock market worldwide when you trade binary options because the stock market does not work on the basis of twenty-four hour trading period.

Being a trader in a binary options market, you usually earn profits after predicting the market trends. This is the reason why volatility is another vital factor that defines the direction of the asset price, meaning a trader will generate maximum profit when a high activity rate is observed in the market. From this scenario, it can be said that when the trader’s activity is good, it gives rise to volatility and liquidity of assets and they can achieve their target before the expiry of the time period during which the option is traded.

You should be well aware of the fact that despite the twenty-four trading period of currencies and commodities, there is only a certain period of the day when high activity is at a higher point, which only occurs if trading zones of the world are overlapped. By now, all of you know that not every asset has same trading hours. Following are some classes of assets and their best trading hours:

1. Best Trading Time for Stocks

Stocks are traded in the market for a period of eight hours out of twenty-four hours and the stocks of significant companies that are outside the United States of America are traded in the US market as American Depository Receipts (ADR). So, it can be said that the US market is used to identify the best period to trade stocks. The standard trading time of the US Stock market starts from 0930 Eastern Time to 1600 Eastern Time.

There are certain markets in the UK that are very important, and being a binary options trader, you should be well aware of the times when stock markets open. For example, FTSE starts from 7:00 am GMT to 3:30 pm GMT and in Germany, the Xetra Dax starts from 8:00 am GMT to 4:30 pm GMT.

2. Best Trading Time for Currencies

Being a trader in a forex binary options market, you should be well aware of the fact that the foreign exchange market has a high activity rate when there is an overlap of the London/New York and London/Asian time zones.

The currencies of the high activity time zone have greater volatility as compared to other currencies. For example, the AUD (Australian Dollar) has a high activity rate when there is an overlap of Asian/London time zone rather than the overlap of London/New York time zone.

The high activity rate is observed in the commodity market during the following time period:

• Gold operates between 0820 EST and 1715 EST.
• Silver operates between 0825 EST and 1715 EST.
• Natural Gas operates between 0930 EST and 1715 EST.
• Corn operates between 0930 EST and 1315 EST.
• Crude oil (NYMEX.CL) operates between 0900 EST and 1430 EST.

You can also combine the commodities in accordance with their respective exchanges if you want to observe their trading time. Let’s say, if you trade an agricultural commodity in Chicago exchange, the highly active time for it will be from 09:30 am EST to 01:30 pm EST.

3. Best Trading Time for Index Futures

Stock Indexes are used to estimate how the relevant exchanges, such as, Dow Jones, S&P and NASDAQ behave. These exchanges are central to the United States market and operate from 09:30 am to 4:30 EST.

Once you are in a position to predict the time of assets, you will definitely be able to place profitable trades and generate more money on your investments.