The Worst And 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

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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.

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.

The Worst And The Best Times To Trade Binary Options

Many binary brokers like to advertise the fact that you can trade binary options round the clock. You can trade 24/7 on our platform, they will often claim.

But of course just because such a possibility exists no one should ever be tempted to try it.

If you’re a scrupulous trader and you try to follow and trade the markets using technical and/or fundamental analysis, you will eventually come to an inevitable conclusion that markets shouldn’t be traded round the clock.

You will realize that there are certain times when it is easier to trade binary options or Forex, just as there are certain times when trading activity should be suspended.

The worst time to trade binary options

Let us first focus on times when we shouldn’t continue to trade. In binary options it’s more important to know when not to trade because losses exceed your winnings with most options.

So when is the worst time to trade binary options (or Forex or any other market for that matter)?

The worst time to trade binary options is right after a winning trade.

The main reason for this is because when we win we get a temporary high feeling from the winning trade, a ‘rush’ that obscures our cognitive senses and we tend to believe in upcoming good trading opportunities a lot easier. This is scientifically proven and there are numerous studies on this subject.

When we win, the brain releases a hormone called dopamine which basically makes us feel very good. The problem is that the as soon as that ‘dopamine high’ starts to diminish, the brain seeks opportunities to get another boost of dopamine.

We are then much more likely to see good trading opportunities in the charts or price action and trade on them quickly.

Chasing winnings is binary options can drain your account very quickly. The best solution to control this type of behavior is to follow your trading plan and remain in control.

Tip! Often the best method is to simply walk away from your computer and cool off for a couple of minutes.

The worst time to trade binary options is right after a losing trade.

Similarly, but for different reasons, one of the worst times to trade binary options is after you’ve just lost a trade. The reason for this is that in such a situation we feel a powerful urge to make up for the losses.

This pressure to recover our losses can also cloud our judgment when it’s most needed. As a result most traders rush into another trade.

If this isn’t bad enough many binary option traders make the big mistake of trading a higher amount in the next trade to cover the initial loss. Needless to say, this type of habit often leads to even bigger losses.

Tip! Again, one of the most effective methods to deal with losses is to keep calm, walk away from your trading station and have a glass of water and take a few deep breaths. Some traders like to do push ups or other quick physical activity to drain their body from the built up tension.

Trading when markets are inactive or sideways.

Trading binary options when markets are not very active may also be quite risky. The main reason for this is that the price action of underlying assets is less predictable without the presence of big influences and clear trends.

This largely depends on your strategy and your chosen options but generally if you’re trading lower time frames it is advised not to trade when market activity is low and trends can not be clearly defined.

Sideways market is often characterized by small candles moving within a narrow sideways channel. They reflect indecision among investors and often also show the absence of market movers.

Tip! The most active market exchange is during the London/New York overlap sessions.

Trading during news announcements and economic releases.

Certain news and the publication of economic data, such as Unemployment rates or Interest rates can cause prices of relevant assets to shift quite suddenly.

Many binary option traders have lost because they traded during such influential announcements.

Unless you’re a dedicated news trader and your strategy is based on the impact of news, it’s best to close your trades before any major news releases. To find out the times of of the most influential releases take a look at our economic calendar page.

Tip! Many traders like to trade after a big release when a new trend has been established and it is confirmed by the price action and trend lines.

The Best Time To Trade Binary Options

Now that we have looked at the worst times to trade binary options let’s examine when it is the best time to risk your hard-earned money on trades.

As it was mentioned earlier that one should not trade binary options during a sideways market, it makes sense the opposite would be true.

In fact, one of the best times to trade short term binary options is during a trending market. This means that trend can be clearly defined, it may be going up or down in a nice channel.

Of course, how you trade the price action within a trending channel is up to an individual trader and his or her own trading strategy.

Tip! However, it should be mentioned that generally speaking trading with the trend is a lot easier than trading trend reversals.

Markets are trending when market makers are trading, this usually falls during the busiest market sessions, the London and New York. It is no coincidence that many professional binary option traders trade live during the London/New York overlap sessions.

However this also depends on the trading strategy, the traded assets and your physical location. If you’re in Asia you might prefer to trade during the Asian sessions.

If you are not familiar with technical analysis or don;t have the time to look at the charts and analyse them, you can subscribe to a professional signalling service that will help you find better trading opportunities much easier.

Best time to trade is when you’re alert, calm, and well rested.

If you intend to trade binary options you should never do it when you’re desperate for money, feeling down, or if you’re frustrated, tense, and tired.

In order to beat your broker’s odds and win at binary options you need to be well rested.

Tiredness will make you miss many good opportunities and you will be unable to think clearly.

Trading is not a game. It is all about calculating probability and you can not do that when your mind is not fully alert. Your mind is the best trading tool you will ever have at your disposal so it needs to be cared for very well.

Likewise, one should only be trading binary options with a calm mind.

The right psychology is very important in trading.

A stressed mentality will result in mistakes and and tangible losses. This in turn will produce even more stress and may lead to even more trading errors.

So the best time to trade binary options is when your mind is calm and your body well rested. It’s when you are positive about your trading and you are clearly focused on accomplishing your goals.

Tip! Many traders take on Yoga and/or meditation practices that help to calm and control the mind and body. Before each trading session some may also find helpful listening to inspirational and motivational speeches or music to get into the right mindset.

Few final words

We hope this article helped to shed some light on the worst and the best times to trade binary options. Please note that times when to trade and when to avoid trading should be clearly outlined in your trading strategy and trading plan.

Please leave your comments below and share your advice and experience.

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.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Perfect For Beginners!
    Free Demo Account!
    Free Trading Education!
    Get Your Sign-Up Bonus Now!

  • Binomo
    Binomo

    Good Choice For Experienced Traders! 2nd place in the ranking!

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