Trading binary options: all in good time
Success binary options trading It largely depends on how good time is chosen for trading. Beginners often have an idea that trading is good only in a non-stop regime, especially when brokers specify the possibility to trade at any time of the day as an advantage. But as a matter of fact all financial markets work in definite time frames.
The financial markets are organized into four trading sessions (How to choose a time for trading?), which alternate so that the end of one is at the beginning of the other:
- Pacific from 1 to 9 o'clock.
- Asian lasts from 3 to 11 a.m. Moscow time.
- European lasts from 9 to 17 hours.
- American from 4 to 24 p.m.
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Pacific - time of exchange trading Australia and Oceania, a good option for traders to trade binary options in currency pairs with the Australian dollar. This region is the periphery of the financial market, strong movements are infrequent here.
Asian - time to trade in currencies such as the yen, the yuan, the Singapore dollar, etc. The greatest number of transactions is carried out with the Japanese yen. The main currency trades are provided by the Tokyo Stock Exchange (Fig. 1).
The intensity of trading is low. However, Japan and China are economic superpowers and there is strong news, affecting the dynamics of BO trading. But, in general, the Pacific and Asian trading sessions are quiet, so trading, for example, with entry on the bounce from the borders of the price channel is more applicable here. It is also important to determine the most profitable time for the trader to trade. For example, from about 6 to 9 o'clock in the morning there is very low volatility, at this time trading in Asia has already ended, and in Europe has not yet started.
The European trading session is considered the most important in BO trading, because important, strong currencies are traded - the euro, the British pound, and the Swiss franc. The key currency to trade here is the euro, and the main exchange is the London Stock Exchange (Figure 2).
Approximately from 10 am to 6 pm, the European session provides active trading of the largest volumes of different currencies, stocks of companies and other assets. Traders have great opportunities to implement complex schemes and make profit from high volatility. It is possible to implement trading on almost any timeframe. In the period from about 9 to 12.30 large players of the financial market, the drivers of currency speculation, come out to trade, they set the tone for the trade, providing a pronounced volatility. Around 12-1 p.m. there is also important news from major European countries, which have a strong impact on the markets.
The working time in the EU ends, Europeans go to drink evening tea, and traders virtually move to trade in the USA, to New York and Chicago - now here also comes the best time for binary options. The American session attracts all binary options traders with the American dollar, the additional weight will come from the active trading in the securities of American companies on the major stock exchanges. The American market is more volatile, characterized by large volumes of turnover, a wide range of instruments, active large participants with great opportunities - all this also provides excellent opportunities to make money, sometimes even with such trading as Martingale.
Probably the best period to trade BO is from 16:00 to 18:00, and at 16:30 news on the U.S., which can break all previous trends and set new ones. Later the activity goes down, but you should be aware of the US Fed meeting dates - the decisions of this regulator are published around 22:00 and these decisions may again set the movement in the markets. Thus, the trade is really round-the-clock, as brokers report, but not constant by the dynamics and opportunities, and therefore by the results. So there is no point in staying up around the clock hypnotizing the price chart on the site, find your option of when it is best to trade binary options.
When choosing an asset, you need to consider where it trades best, as well as at what time. Or vice versa, based on the time available for trading, choose the appropriate sessions, instruments and times. If on the Pacific and Asian sessions, trading is possible, in principle, on the trend, when "everything is in the price", then on the European and American sessions it is necessary to use such instruments as indicators for binary options.
Days of the week
The day of the week is also important for binary options tradingThe strategies and tools used should be adjusted depending on the day the trades are held, determining your best time. Monday: Monday is characterized by the fact that sharp price movements are rare, so trading on Monday is quiet as a rule, the schemes of trading securities for the flat market are applied. However, on Monday the price often jumps up or down dozens of points at once because of some economic news. That's why when trading (How to trade in BOO without risk) The deals should be closed at the end of the previous week, and on Monday you should not lose vigilance, be ready for sudden price changes.
Tuesday, Wednesday and Thursday are the main trading period, most events in the financial markets occur, leading trends are strengthened and new trends are formed. Tuesday and Wednesday are the most active trading periods, strategies for binary options for 5 minutes can be optimal. Thursday is usually a calm day, trading is quite possible even with a tool trading signals online for binary options, provided free of charge by qualified brokers.
Friday is officially the last day of the trading week before the weekend, with traders taking profits or losses. But, of course, this does not exclude sudden sudden price movements. The first Friday of the month (non-farm) is different from other Fridays, because the US publishes information about the state of the labor market, which strongly influences global financial markets, accordingly, and binary options, strategies and tools for this day should take into account the powerful price impulses in almost all pairs with the dollar.
Saturday and Sunday are weekends, most assets are not traded, the exchange does not operate on weekends, but there are "Over the counter" assets - you can trade over-the-counter transactions directly between the seller and the buyer, which are provided by banks. On holidays and weekends, trading also takes place. We are talking here, first of all, about Christmas and Christmas vacations in Europe and the USA. Traders' activity in those regions is reduced around December 20 to January 5, which affects markets in all regions. Flat trading is more relevant this weekend. But do not relax, it is a long time and there will almost certainly be some events that will cause currencies to move fast. Just a few New Year's weekends the key players do not work, and companies withdraw money, the activity slows down. In order not to make a mistake about when to trade options, many traders make a schedule of markets, weekends, and asset schedules.
Gap is a gap in quotations, a big difference in quotations of an asset, for example, on Monday, with the beginning of a new trading week compared to the closing price of the previous Friday. Because of the danger of the gap, if there are no plans to actively trade at night, trading binary options trader should close at the end of the trading day, and especially on Friday evening, fixing the results. If there is no experience with strong price spikes, then on Monday, it is better not to start trading binary options in the early hours. After the gap has "worked out", the market returns to some "fair price", which is close to what it was before the gap. Thus, it is more likely that the trader will be able to make money with the top binary options - Up/Down and One Touch, if he calculates a good entry time accurately.
News as a time factor
Some news is released strictly on a regular basis, so it is advisable to consider it as a timing factor. The release of important news has a major impact on the financial sector - the stock market, forex market and, accordingly, on binary options trading. This can be the basis of a trading strategy, and it can be profitable, although very risky. In general, the foreign exchange market is influenced by reports and announcements from agencies and regulators that come out regularly. Macroeconomic news, announcements of major transcontinental companies, banks, investment firms, broker reviews - they usually come out after a waiting period rather than suddenly, so it is advisable to use them as well.
Political, geopolitical messages also influence, but they are often unpredictable and often represent an additional risk factor rather than an earning opportunity. At least, a trader should be very attentive and work on short timeframes. But there is an opportunity to make money here as well, for example, if a speech of the US President is expected, it is better to listen to it online and next to the online trading terminal - every word can affect the dollar and cause volatility, including in binary options. Trading 1 minute strategies will be most relevant here. Regular news items that affect option trading almost immediately include:
- the unemployment index in the United States (Figure 3);
- interest rates of central banks, with the Fed rate affecting all markets, the EU central bank rate mainly on currency pairs with the euro. Central banks' rates affect currency pairs with the respective currencies;
- consumer activity and consumer price indices;
- index of manufacturing and non-manufacturing sector activity.
It is important to keep in mind that many brokerages prohibit trading on the news. If the broker allows such trading strategies, then you need to choose a broker that also allows you to close trades early. But before trading binary options in this way, education followed by training - either independently or on the broker's website - obviously does not hurt. Binary options brokers in the analytical information sections of the site provide key economic news, instrument reviews, as well as the trading schedule. If the broker does not have such information, it can be found on forex brokers' websites.