What is the Best Time to Trade Binary Options
It is no secret that timing plays one of the most important roles when it comes to trading in the stock, forex, commodities, and even the binary options market. Prices move in either direction based on numerous factors, which makes it even more crucial to determine what could possibly be the best time to trade binary options. One of the biggest advantages of the binary options market is that any time is a good time to trade since you can make money irrespective of market trends. All you need is to place a ‘Call’ when the price of an underlying asset rises and a ‘Put’ option when the price indicates an upward trend. That’s how simple binary options trading is. However, there is much that you can still do as a trader to strike at the right time and maximize the potential to earn profits and watch your trading account swell.
Take advantage of market timings around the globe
Some assets such as currencies experience fast action especially currency pairs. In addition, the forex market is traded on a 24-hour basis. For the most part, trading is best when there is a flurry in the market. This generates much needed volatility and liquidity for an underlying asset to reach its strike price prior to expiry of a binary option. When it comes to forex, possibly the best time to trade binary options is when there is an overlap of the London/Asia and London/New York time zones. For example, hours when sessions overlap:
New York and London – 8 am to 12 noon EST
Sydney/Tokyo – 7 pm to 2 am EST
London/Tokyo – 3 am to 4 am EST
Between 8 am and 12 noon EST is approximately the best time to trade EUR/USD and GBP/USD currency pairs since two markets are active. This is the time when you will find the highest volume of trades and better chances of a winning trade.
Timing your trade in stocks, commodities and indices
Trading stocks in binary options also depends much on the time zones. The advantage is you get to trade stocks almost around the clock since bourses open and close at different times around the globe. Stocks are typically traded for 6 – 8 hours with the US stock markets open from 9:30 am to 4 pm EST. On the other hand, European markets such as the FTSE is open for trading from 7am GMT to 3:30pm GMT while in Germany the Xetra Dax is open between 8am GMT and 4: 30pm GMT.
Commodities are universal in their trading times, which makes it more difficult to determine the right time. It is prudent to keep abreast of economic events and reports released in order to anticipate market movements.
There are specific times when the commodities binary options market is most active. Commodities such as crude oil trade between 9am EST and 2.30pm EST, Natural gas – 9.30am EST to 5.15pm EST, and Gold – 8.20am EST to 5.15pm EST. You could group commodities according to the exchanges where they are traded. On the other hand, stock indices such as NASDAQ100 and DJ30 are open from 9.30 am EST to 4.30pm EST to conform to the US markets.
Trading during open and close
There is no doubt that there are specific times of the day when binary options can be traded to generate maximum returns. Typically, most traders either like or hate the opening session which can often be most volatile. If you wish to see significant moves in prices the best time to trade binary options will be as close to the opening session as possible. This gives you the opportunity to place your trade in the money within minutes. One of the biggest advantages is you can implement a hedging strategy if your trade begins to move out of the money. Trading during the last hour also gives you the chance to place high reward / low risk trades.
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