The Best Time to Trade Binary Options

The Best Time to Trade Binary Options

Submitted by lsf273 on Thu, 01/02/2014 - 20:54

Binary Options trading is tough and most often, it takes a lot of time to place a successful trade. However, you can cut the time spent on trading quite considerably if you can learn to identify when prices are going to change. Recognizing the best time to trade not only allows traders to earn more profits but it also helps them to work on new strategies.

Let's take the example of stock market. It is very simple to recognize when the trading volume will be the highest. In stock market, the most common actions occur early in the day or immediately before closing of the day. However, in case of binary options, the brokers do not allow traders to trade underlying stocks within first half hour of the regular trading day. It simply means that you will have to focus once this time has passed. The time also varies for each broker and it is around 10 am to 10:30 am for most of U.S. stocks.

Again, it is bit more confusing to trade other stocks. You have to ensure that there is a definite price movement when you place the trade. If you start trading at times when there is zero or negligible movement, your predictions can prove to be drastically wrong. It is really tough to identify the best time in this regard as the trading continues for 24 hours. However, you will definitely observe some patterns where the significant price movements take place.

A typical example is that of various currencies that experience movement when certain markets close. For instance, the Japanese Yen is closely connected to open market timings of Japan. Therefore, if you are trading in USD-JPY, it is imperative for you to get to know when trading day of Japan begins and comes to an end in order to identify best time to trade USD-JPY currency pair. The market day in Japan begins at 7:00 pm and closes at 3:00 am Eastern time. The highest movement for Yen will normally occur during the half hour blocks immediately near these timings.

Similarly, you can adopt the same strategy if you are trading in Euro, just simply observe European trading times. For instance, Frankfurt's open market remains open from 2:00 am to 10:00 am Eastern time.

When it comes to commodities, it is even more difficult to recognize what is the best time for trading. These underlying assets are not pertinent to any particular market as they are universal in their trading times. In this case, you can make most of your trade by looking at certain economic events. Certain countries release news or reports about their major commodities at certain time. Therefore, it is important for you to beware of the timings of such releases in order to best anticipate in the market movements.

The trading technique discussed above is sentimental analysis and you can apply it to other types of assets as well. For instance, having an idea about when a Central Bank is about to release new interest rates or a company is about to make a major announcement will definitely help you to better trade currency and more efficiently trade stocks.