Trading is tough and it is often time consuming. If you could somehow know exactly when prices are most likely to change, you could significantly cut down on the amount of time you actually spent trading and put that extra time to a better use somewhere else.
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Luckily, you can determine the best time to trade and this can have a big impact on the rest of your life. No one wants to spend all day in front of the computer, and figuring out when the best time to trade binary options can help you find more free time.
Recognizing when trading volume is at its highest is the first step to figuring out the best times to trade. For stocks, this is pretty easy to figure out. The most action occurs when the trading day is first starting out and right before the end of the day. However, many binary options brokers do not allow for trading underlying stocks during the first half hour of the regular trading day. This means that you should focus on after this time period has passed. For U.S. stocks, this is going to be at around 10:00 or 10:30. This will vary from each broker.
However, trading other assets is a bit trickier. You want to make sure that there will be definite movement; trading when there is little or no movement drastically increases your risk of being wrong in your predictions. You might think that this is a tough question since many assets are traded around the clock, but there are definite patterns that arise as to when the most movement occurs.
For example, currencies generally see the most movement when certain markets close. The Japanese yen is closely connected to Japan’s open market times. If you are trading the USDJPY currency pair, knowing when Japan’s trading day begins and ends will help you to figure out the best times to trade. For U.S. traders, the Japanese market day begins at 7:00 PM Eastern time and closes at 3:00 AM Eastern when you look at Tokyo’s times. The half hour blocks immediately near these times is going to see the most movement for the yen.
If you are trading the Euro, you will want to look at European trading times and adopt a similar strategy to trading as you would take on for the yen. The European market (Frankfurt) is open from 2:00 AM Eastern to 10:00 AM Eastern.
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Commodities are a bit more difficult to determine when you should trade them. These underlying assets are universal in their trading times and are not unique are pertinent to any one marketplace. For these, looking at economic events is going to be in your best interest. Certain nations will release reports or news in regard to the major commodities at certain times and being aware of when these things will be released is a key part of anticipating market movements. This does make analyzing commodities a bit more difficult than trading other assets, but knowing when commodities are most likely to move, you are giving yourself a big advantage and saving yourself a lot of effort.
This is called sentimental analysis and can easily carry over to other types of assets, too. Knowing when a company is going to make a major announcement can help you to more efficiently trade stocks and having an idea of when a Central Bank is going to release interest rates can help you to better trade currency.
Trading in this manner will not give you a set trading time from day to day, but it will easily reduce the amount of time you spend actively trading. Managing your time will allow you to trade smarter and reduce the amount of time you waste each day.