Best trading hours for binary options
According to a survey of binary options traders, the best time to trade binary options is between the hours of 6.00-12.00 GMT and 18.00-0.00 GMT. This is when the highest percentage of profitable trades are made.
Timing is everything in trading binary options. While these derivative contracts offer flexibility to trade around the clock, some hours are harder for capitalizing on market movements. Experienced traders know that zeroing in on optimal trading windows can give one an edge.
As with many pursuits, the busy times tend to be the best times. When market activity and liquidity surge with multiple exchanges overlapping, opportunities abound. But finding the sweet spot demands understanding typical global session schedules and how they intersect. It also means setting aside assumptions that 9-to-5 rules apply.
This guide shares valuable intel on discerning the ideal hours from an insider's perspective. From surveying top traders and analyzing trading volumes, key sessions are identified for various asset types. Practical tips too are included to help maximize the potential of these productive periods. Ultimately, the strategies outlined aim to stack the odds favorably for those seeking profits in the competitive world of binary betting.
Key points from the article
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For stocks, the optimal times are when the major stock exchanges are open - for example, 9:30-16:00 EST for US stocks and 8:00-16:30 GMT for UK stocks.
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Forex trading is often best when both the London and New York sessions overlap from 8:00-12:00 GMT. This provides higher volume and liquidity.
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Commodities like oil, gas and precious metals can be traded between 9:30-15:00 EST for volatility.
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Traders should avoid trading when markets are sideways or inactive as price behavior becomes less reliable.
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Weekend binary options can be traded but liquidity is lower, requiring more caution.
What are typical trading sessions for binary options?
Binary options trading can be broken up into three main sessions. These are the Pacific session, the Asian session, and the European/American session.
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The Pacific session runs from 22.00 GMT to 7.00 GMT.
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The Asian session runs from 23.00 GMT to 9.00 GMT.
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The European/American session runs from 8.00 GMT to 17.00 GMT.
According to a survey of binary options traders, the best time of day to trade is between the hours of 6.00–12.00 GMT and 18.00–0.00 GMT. This is when the highest percentage of profitable trades are made.
The best time to trade
What is the best time to trade binary options?
The binary option marketplace is consistently active for some assets. For instance, cryptos can be exchanged around the clock. On the other hand, you can only trade binary options on stocks when the corresponding stock exchanges are open. Most of the time, the best time to trade binary options is when most traders are trading.
These times see the highest levels of market volatility and liquidity. During these busy times, prices will also change a lot, giving you more chances to make money. For instance, binary options on stocks can be considered as an example. Undoubtedly, the busiest times will be when each stock market is available for trading. Although resources like commodities and currencies are accessible 24/5, trading activity is only at its peak during particular times of the day. This mostly happens when the trading hours of different global markets coincide, for instance, when Asian and European markets are jointly open.
Let's examine the ideal time for trading each asset.
Stocks
Most stocks are traded for 6–8 hours per day rather than being available the whole day. This is because you can't get to them unless their stock market index is turned on. For example, you can only trade the stocks of Japanese companies on the Tokyo exchange market. British stocks are traded in the London market, and Australian stocks are traded in Sydney.
The optimum time to trade in the US on the renowned Nasdaq and the New York Stock Exchange is during their 9:30-16:00 EST hours. The London Stock Exchange trades on the European markets from 8:00–16:30 GMT. The Frankfurt Stock Exchange in Germany is highly active from 8:00 to 16:30 GMT.
Currencies
The best time to trade Forex typically occurs during the overlap of major financial market sessions, such as the London and New York sessions, as this is when the highest trading volume and liquidity can be found. Traders often focus on the hours when both these sessions are open, which is usually from 8:00 AM to 12:00 PM (noon) EST, as it tends to offer better trading opportunities and reduced spreads.
Commodities
Binary trading frequently involves commodities, which are typically traded when they are inexpensive. The most sought-after commodities by traders are crude oil, natural gas, silver, and gold. The optimum time to deal with binary options on commodities is when the marketplaces are particularly active. Depending on the product, this will change.
On the Chicago Mercantile Exchange, agricultural goods should be traded between 9:30 and 13:15 EST and then again between 18:00 and 7:15 EST. The ideal time to trade for commodities like crude oil and natural gas is from 9:30-15:00 EST, whereas precious metals are most prevalent from 8:30-17:00 EST.
When should I stop binary trading?
It's important to recognize when it's best to stop trading Forex or binary options and when it's the most convenient option. Let's look at the times when you should stop binary trading.
After a winning trade
After a successful trade is the worst time to trade binary options, and this is when you should always stop. The primary explanation is that when you win, the winning deal gives you a momentary good feeling. It's like a "rush" that makes it hard to think clearly, so it's easier to think that good trading opportunities are coming up. Binary options trading can quickly deplete your account if you chase gains. The best way to deal with this is to stick to your trading plan and stay in charge.
Sideways or inactive markets
Binary options trading can be hazardous when markets are not particularly active. The main reason for this is that the price behavior of underlying assets becomes less reliable when there aren't any big effects or clear trends. This greatly depends on your approach and the options you have chosen. Still, generally speaking, it is advisable to stop trading when market volatility is minimal, and trends cannot be easily identified. Small candles moving in a constrained channel are frequently used to determine the direction of the sideways market. They display investor hesitancy and a lack of market movers.
Reached your daily or weekly limit
Binary options operate within a tight timeframe, sometimes expiring within minutes or even seconds. This quick turnover rate means you can reach your daily or weekly trading limit faster than with other forms of trading. Reaching your limit consistently could point to poor risk management or an ineffective trading strategy. If you find that you're hitting your cap frequently, take a step back. Evaluate your trading strategy, the market conditions, and whether you're allocating your resources wisely.
Lack of focus
The fast-paced nature of binary options demands your undivided attention. You'll need to stay glued to market trends, data releases, and other crucial pieces of information. If you notice your focus waning or that you're making trades without full concentration, it's time to pause. A lack of focus can lead to rash decisions and, ultimately, significant financial losses. Rest, regroup, and return when you can give trading the attention it rightfully demands.
Unexpected Market News
The market for binary options is highly sensitive to news and sudden market events. These can include economic data releases, geopolitical developments, or even natural disasters. If you find that you're consistently blindsided by these types of events, it might be time to reconsider your involvement in binary trading. Being constantly caught off guard means you're not prepared, and in the world of trading, unpreparedness often equates to unnecessary risks. Consider transitioning to other trading options that provide a larger window for reaction and analysis.
Reaching Your Long-Term Financial Goals
While binary options can be exciting and offer quick returns, they're not the best vehicle for long-term wealth accumulation. Their inherent risks and short-term focus make them ill-suited for anyone looking to build a diversified portfolio aimed at long-term growth. If your primary financial goal is long-term stability and growth, you should look into other forms of investment, such as mutual funds or individual stocks, which offer both. Know what you're getting into with binary options they serve a purpose but might not align with your broader financial goals.
Use binary trading times efficiently
Now that you're aware of the ideal binary trading hours, it's time to put them into practice. Brokers make mistakes, and newcomers are more likely to do so and lose a lot of money as a result. So, to have a successful trading experience, adhere to the following guidelines.
Apply a plan of action
The chances of profitable trading will always rise with the application of a strategy. You can trade more successfully and make more rational decisions with a good plan. Every trader should decide what to do based on how much risk they are willing to take, how much time they have to trade, and any other factors that may affect their choice. It's crucial to avoid overextending any strategy's tolerance for risk. When they first begin trading, many traders adopt the 1% rule, which specifies that over 1% of their cash will not be placed on a single binary options exchange.
Choose a time
Selecting a trading period that overlaps another is preferable. Consider the time when the American and British stock binary exchanges coincide. You must now be precise about the interval, which must be at least two hours. Do not fix it for more than two hours; keep it to a limit of one hour. Make thorough inquiries about the markets in those nations, and keep an eye on the pip rates. It would be sufficient if you were receiving at least 15 pips.
Utilize early binary trading hours
Please don't limit your activity to the best time for binary trading since it has been provided. It would be best if you arrived at your workstation at least an hour early. Since most traders are from different countries and binary trading is closely tied to how the market moves, it will be hard for traders to keep up with what's going on. Make sure you listen to what market experts tell you and that you have everything you need.
Can you trade binary options on the weekend?
Yes, you can trade crypto-backed binary options on the weekends. However, it is important to note that weekend trading occurs in a less liquid market, which can lead to increased spreads and price gaps when markets open on Monday. Here are some pros and cons of trading binary options on the weekends:
- Pros:
- Cons:
- Opportunity to take advantage of lower spreads and higher liquidity.
- Opportunity to find better deals.
- More time to analyze trades.
- Low liquidity in some markets.
- Lack of trading assets.
- Higher risks due to lack of news and other market factors.
- Limited access to underlying asset pools.
- Fewer brokers available
Weekend trading hours
If you live in a time zone that doesn't match up with the active hours for weekend binary options markets, you may end up trading at less convenient times. This could mean trading late at night or very early in the morning. Such unusual hours could be a challenge if you have other commitments, like a day job or family responsibilities. You might have to sacrifice sleep or personal time, which could then affect your focus and your ability to make smart trading decisions. So, if you're considering weekend trading, make sure you're ready for the time commitment it might require.
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Team that worked on the article
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
Binary options trading is a financial trading method where traders speculate on the price movement of various assets, such as stocks, currencies, or commodities, by predicting whether the price will rise or fall within a specified time frame, often as short as a few minutes. Unlike traditional trading, binary options have only two possible outcomes: a fixed payout if the trader's prediction is correct or a loss of the invested amount if the prediction is wrong.
Fundamental analysis is a method or tool that investors use that seeks to determine the intrinsic value of a security by examining economic and financial factors. It considers macroeconomic factors such as the state of the economy and industry conditions.
Volatility refers to the degree of variation or fluctuation in the price or value of a financial asset, such as stocks, bonds, or cryptocurrencies, over a period of time. Higher volatility indicates that an asset's price is experiencing more significant and rapid price swings, while lower volatility suggests relatively stable and gradual price movements.
CFD is a contract between an investor/trader and seller that demonstrates that the trader will need to pay the price difference between the current value of the asset and its value at the time of contract to the seller.
Options trading is a financial derivative strategy that involves the buying and selling of options contracts, which give traders the right (but not the obligation) to buy or sell an underlying asset at a specified price, known as the strike price, before or on a predetermined expiration date. There are two main types of options: call options, which allow the holder to buy the underlying asset, and put options, which allow the holder to sell the underlying asset.
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