Knowing when to trade can be just as powerful as knowing what to trade. This is especially true when you are looking at binary options. Historically, assets are at their most active in terms of volume when their markets first open up and when they are getting ready to close down for the day. With binary options being widely available on a 24 hour basis, there is quite a bit of temptation to trade whenever is convenient for you, but you will find that by focusing on certain hours of the day, you can put a fine focus on your trading day and even end up spending less time in front of your computer, too. This can be very advantageous and can completely change how you trade, and can even make you more of a profit. You can still make money during the slower hours, but this requires a more intensive time commitment on your behalf. Ideally, you will want to make as much money with as little effort as possible.
The tricky thing is that each set of assets has their own timeframe, and even then, some assets have multiple timeframes where they are most heavily exchanged. For example, things are pretty straightforward if you are trading U.S. based stocks. Markets open at a certain time (9:30 AM EST), and close at a certain time (4:00 PM EST). Stocks tend to be at their most active in the half hour after the New York Stock Exchange opens, and a half hour before they shut down for the day. Oftentimes, you will even see that the price patterns can be extremely predictable, especially if relevant news comes out during off hours. To combat this, many binary options brokers do not have stocks available during the first half hour of the day, but this should not be treated as a major inconvenience. Prices fluctuate all day and even though they might not move as much after 10:00 AM, they can still be predicted with a degree of certainty. The above information can also be applied to the indices that are comprised of stocks.
Things like currencies and commodities might not seem like they can be traded in this manner, but with a careful eye, you will find that this is actually not true. Currencies move most during certain hours. Let’s look at an example.
Assume you want to trade the Japanese yen in relation to the U.S. dollar. The JPY/USD pair can be traded 24 hours a day, but if you actually watch trading volume, you will see a recurring theme. The yen will be at its most active during the Japanese trading day. If you are looking at trading the yen/dollar pair, you need to know that the Tokyo market is open from 7:00 PM EST until 3:00 AM EST. You will also see that currencies fit into the same pattern as stocks. Forex trading is at its highest volume when markets first open. So if you want to trade the yen binary options, it only makes sense that you are at your computer from 7:00 to 8:00 or so.
Trading with a binary options demo account can give you some real time experience when it comes to figuring out when markets are at their most active. High volume means more movement, and this can be very valuable to the binary options trader, especially when assets are moving in a predictable pattern. If you’re new to this timing technique, using a demo account to find a good rhythm will allow you to make more money, and spend a lot less time while doing so.