Thursday, June 7, 2012

What is the Best Time to Trade Binary Options?

Online Investments in Binary Options Tips
While traditional trading in stock, indices and commodities will rely on the volatility of the market to make the most profits, binary trading however relies on the price which will determine whether you will get a predetermined profit or a “predetermined loss”. For example, a binary trader will make the same profit irrespective of whether there is a 2% or 20% increase in the price of the underlying security whether it is stock, Forex, indices or commodities. This makes market volatility almost irrelevant and timing of trading the most relevant factor that traders must put into consideration. As a result, the best time to trade binary options is something that is often uppermost on most traders’ minds.

But what is the best time trade binary options? For experienced traders, timing is a factor but not necessarily the most important factor since knowledgeable binary options traders use a set of data and predictive tools to determine the price direction on any particular day. This gives them a versatile set of tools and data on which to rely on. For investors and new newcomers in this type of investments, information on the best time to trade binary options will be hugely useful in avoiding losses associated with trading during volatile and unpredictable periods in the market.

There are two ways in which you can determine the best time to trade binary options. The first method often involves the timing that is broadly based on trading hours and trading days and the second option involves timing based on the types of the underlying securities such as stocks, currencies, commodities and indices.

Timing-based Trading Hours and Days
For new traders, certain hours are generally considered the best time to trade binary options while some hours are generally considered to be fraught with lots of risks. For example, it is generally not advisable to trade binary options during the first 30 minutes after the opening of the market so as to allow the prices of the underlying security to settle. Likewise, trading in the closing hours might not be advisable for a newcomer or trader due to the fact that the behavior of the market at this time is quite volatile. It is therefore often broadly advisable to trade your hourly expiring binary options in between these hours when you can determine the price direction confidently.

When it comes to daily expiring binary options, the best time to trade binary options is normally in between Monday and Friday. Monday morning is often highly volatile and it will be hard for you to get a clear price direction in order to make a profit on your binary options. Likewise, Friday afternoon is also not the best time to trade binary options due to market volatility which will make it difficult to

Timing based on the Types of the Underlying Securities.
Binary options prices are often derived from certain underlying stock, forex or commodity prices. It is therefore possible for you to maximize the profits at certain times in which these markets have heightened activities. Determining opening and closing hours of the various currency, stock and commodity markets is therefore important in helping you determine the best time to trade binary options in these markets.

If your binary options are based on stock, it will be important for you to understand the trading hours of the major global stock markets including the NADAQ, London’s FTSE, and Frankfurt’s DAX amongst other major markets in Europe in order to determine the best time to trade binary options in those markets. The US stock markets will open at 9.30am EST and closes at 4pm EST. The London FTSE opens at 0700UTC and closes at 1530UTC while Frankfurt’s DAX opens at 0800UTC and closes at 1630UTC. Knowing the opening and closing times will help you in determining the periods when the market is abuzz with activity and at its most volatile.

When your binary options are based on currencies, then you need to understand the best time to trade binary options in the currency markets. This should be the time when the currency markets are normally abuzz with the most activity and thus there is volatility in the market.  The key timelines to monitor here are the Tokyo, New York, Sydney and London. Currencies markets are normally abuzz during overlaps in the London/Asian time which is from 0300am to 0400am EST and London/New York time which is from 0800am to 12 noon EST.

For commodity prices, the best time to trade binary options derivatives is by evaluating the best time for mot activity in these markets. Some of the markets that you will evaluate the Crude Oil(opening from 9am to 2.30pm EST), natural gas(9am to 5.30pm EST), corn(opening at 9.30am and closing 1.5pm EST), gold(opening at 8.20am and closing at 5.15pm EST) and silver(8.25am to 5.15pm EST).

For index binary options, the best time to trade binary options coincides with US time s for opening and closing the US stock markets including NASDAQ, S&P500 from 0930am to 1630pm EST. You may also evaluate the timing of other global markets in Europe to determine the best time to trade binary options.
Experienced traders will have varied tools to rely on in predicting the direction of prices and may not necessarily be compelled to adhere to this strict timing regime.

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