What are the Best Times to Trade Binary Options

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The Best Times to Trade Binary Options

Lesson 1: The Best Times to Trade Binary Options

Welcome to our new series on binary options trading for beginners, where we will take you by the hand and show you a systematic way to trade binary options. Today we will touch on the best times to trade binary options.

Binary options’ trading involves trading several assets and making money based on the outcome of the price direction. Some of these assets are traded on a 24-hour basis: here we have currencies, commodities and stock indices. Stocks are not usually traded on a 24-hour basis. The trading hours of a stock market determine the times at which a stock listed in that market is traded. When you take the time zones of the trading capitals of the world into consideration, this gives different trading hours for trading stocks on the binary options market.

The binary options market is one where traders make money based on predicting direction, and volatility is what gives price action direction in the market.

Trading works best when the market is bubbling with activity from traders all over the world. When there is good trader activity in the market, it generates the liquidity and volatility needed for the underlying asset to get to its target before the option expires.

Even though assets like currencies and commodities are supposed to be 24-hour markets, there are only certain times of the day when the market activity is at its maximum. This is usually when we have an overlap of the trading zones of the world.

Because not all assets have the same trading hours, we will discuss the various classes of assets as separate entities, taking into account their own peculiar trading hours.

Timing for Stocks

As we mentioned earlier, stocks are usually traded for a maximum of 6 to 8 hours a day. Stocks of most major companies outside the US are traded on the US stock markets as American Depository Receipts (ADR). As such, the US markets are used as the benchmark of checking the trading hours for stocks. US stock markets usually trade from 9.30am EST to 4pm EST.

However, there are other markets in Europe that are just as important, such FTSE (7am GMT to 3.30om GMT) and the Xetra Dax (8am GMT to 4.30pm GMT) in Germany. If you are trading stocks in the binary options market, pay attention to the times at which the stock markets in which they are listed are in operation.

Timing for Currencies

The forex market is most active when there is an overlap of the London/Asian and London/New York time zones. The diagram below gives a perfect illustration of this.

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You also need to know that the local currencies of the active time zones will have increased volatility over others. For instance, the Australian Dollar will be more active during the Asian/London time zone overlap than the London/New York time zone overlap.

Timing for Commodities

Commodity markets are most active at the following times:

Crude oil (NYMEX.CL) – 9am EST to 2.30pm EST

Natural gas – 9.30am EST to 5.15pm EST

Corn – 9.30am EST to 1.15pm EST

Gold – 8.20am EST to 5.15pm EST

Silver – 8.25am EST to 5.15pm EST

Another way of studying the trading times would be to group the commodities under the exchanges where they are traded. As such, the agricultural commodities, which are traded in the Chicago Mercantile Exchange, are more actively traded from 9.30am EST to 1.15pm EST and from 6pm EST to 7.15am EST the next day.

Full information on trading hours is available on the CME Group website.

Timing for Index Futures

Stock indices are CFD instruments that measure the movement of the relevant exchanges, As such, the DJ30, NASDAQ100 and S&P500 will conform to the US markets open from 9.30 am EST to 4.30pm EST, and the DAX30 will conform to that of the Xetra Dax’s trading hours.

Once you master the trading hours for each asset, you are one step away from potential profitability in the market.

What Is The Best Time To Trade Binary Options?

If you’ve decided to get into binary trading, you’re going to want to make sure that you know what you’re doing before you plunge in. And part of that is coming up with a trading plan. That’s right, a plan, not just a trading system you read about. A plan incorporates other aspects of your trading than just your strategy, like what times of day and which days of the week you’re going to be the best to trade.

Thanks to the way that binary options are traded, you can trade pretty much any time. You’re setting an order which will expire at some point in the future, which gives you a lot of flexibility.

What are the best and worst times to trade binary options?

  • During financial report releases and big news events. Whether this is a “best” or “worst” time to trade depends totally on you. If your strategy incorporates fundamental analysis, this may be when you place your trades. If you’re trading based on these events, you can make great money. If you don’t know what you’re doing and you trade during these times, however, you can lose a lot of money equally fast. Regardless of whether you trade during these times or not, be aware of them and decide on a consistent way to deal with them.
  • Weekends and holidays. While some markets are open 24 hours, they aren’t open all week; even the Forex market shuts down over the weekend, and markets also take holidays. If you trade over a weekend or holiday you’re going to be faced with slippage and unpredictability when the market comes back into session. Great way to lose money! This is a bad time to trade.
  • Middle of the week. This is a good time to trade, assuming of course there’s a rationale for placing a trade. Most unpredictability happens when you come back from a weekend or head into a weekend, so these days are usually a little less unpredictable.
  • Times of day when nothing happens or any time when the market is behaving unusually. You’ll find out quickly that different financial instruments are more volatile at different times of day. If you’re a short-term trader, you won’t want to trade during times when there’s no real opportunity to make money. At the same time, though, you want to avoid whipsaws and choppiness.

Hopefully following these suggestions will help you to avoid occasions where you’d be likely to lose money.

Always test your method on real time data before you go live by opening a demo account with your broker! If you are a US based trader, we have a short list of binary options US citizens accepted to trade binary options.

When is the best time to trade binary options?

Success in binary options or forex trading for that matter is hinged on a variety of variables. We can however all agree that trade entry and exit times dictate whether your trade will end in the money or out of the money.The best time to trade is always an elusive topic especially if you are new to financial trading. Well, initiating trades haphazardly is tantamount to trading career suicide. To that end, we have compiled an article detailing the best time to trade binary options.

If you are a new trader, read our article on why binary options trading is better than forex before proceeding.

Just to recap, binary options trading involves predicting whether the price of the underlying asset will rise or fall in a specific period. Unlike trading forex and other financial markets, the magnitude of price change does not affect the final result of a binary options trade and hence you don’t have to be a financial whiz to make a killing.

Best Time To Trade Stocks

New York Stocks Exchange

Although binary options brokers provide 24/7 trade platform access, it is important to note that availability of specific stocks is dependent on opening and closing times of specific stocks exchange under which it is listed. That being said, it is always upon you to do due diligence and figure out opening and closing time in your time zone.

For instance, the NYSE is usually active from 0930 hrs to 1600 hrs EST. You can trade FTSE-listed stocks from 7 am to 3:30 pm GMT. Additionally Xetra DAX can be traded from 8am to 4:30 pm GMT. So, essentially, the best time to trade stocks is when their respective markets are open. Else, you will trade against flat price movements and that can hugely affect your bottom line.


Best Time To Trade Currencies

To succeed in currency trading, you must identify the most active trade times. From experience, the best time to trade currencies with binary options is when the London-New York and London-Asian time zones overlap. For instance 0800hrs to 1100hrs GMT-5 is a perfect window to trade currencies. On the same light, it is imperative to note that currencies are most volatile when their respective exchanges are open.

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  • Binomo
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    2 place in the ranking!

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