Best Time To Trade Binary Options
The best time to trade binary options is usually when the respective market is busiest, with the maximum number of active traders. This helps provide competitive payouts and premiums. The optimal window can also vary depending on where you are trading, for example, the USA, UK, Kenya, India, or the Philippines. In addition, ideal timings will depend on the market, be it stocks, forex, or cryptos.
This trading tutorial explores the best time to trade binary options in 2024. We consider volume and volatility requirements, strategy elements and more. Find out how to maximize your chances of success when trading outcome-based binaries.
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What Is Binary Options Trading?
To understand ideal trading windows, investors first need to appreciate how binaries work. In binary options trading, the investor is presented with two outcomes to choose from. They invest capital based on whether they think the price of an asset, for example gold, will either rise or fall, or stay within a defined channel. If they are correct, they win a predefined amount of profit from the broker, known as the pay-out. If their prediction is wrong, they lose their initial investment.
When you enter a binary options trade on your account, you know exactly how much capital you stand to make or lose. Fortunately, you can minimize the risk to your funds by implementing a reliable strategy. Investors can learn how to trade binary options by using different tools like charts, indicators, plus support and resistance levels.
Importantly, you can trade binary options on almost any market, including forex, commodities, stocks and cryptocurrencies. Investors can trade on exchanges in a wide range of jurisdictions including the UK, Europe, Nigeria, South Africa and Singapore, although the best time of the day to trade binary options in each of these areas will vary.
Example Trade
Binary options trading is best explained through an example…
Imagine that Amazon stock (AMZN) is trading at $2107 per share. If the investor believes that after 30 minutes, the price of AMZN will be below $2100, they can open a binary options trade with an expiry time of 30 minutes and stake $100. The broker offers a 75% payout on this, meaning the investor stands to make a $75 profit if they are correct.
After 30 minutes, the value of AMZN has dropped to $2095.77, and the investor is paid their original stake plus $75 profit.
What Are The Best Times To Trade Binary Options?
For certain assets, the binary options market is always open. For example, cryptos can be traded 24/7. However, binary options for equities can only be traded when their respective stock markets are open.
Importantly, the best time to trade binary options is generally when the number of active traders is at its highest. Markets are most liquid and volatile during these periods. It is also during these busy times that significant price swings will occur, providing more opportunities to make profitable trades.
Taking binary options on stocks as an example, it is logical that the periods of the highest activity are when each respective stock market is open for business. However, even though assets like currencies and commodities are open 24/7, there are only certain periods of the day when trading activity is at its maximum. This typically occurs when there is an overlap in the trading hours of the various markets around the world, for example, when both the European and Asian markets are open simultaneously.
Best Time To Trade Binary Options By Asset
Stocks
In the majority of stock markets globally, shares are available to trade for around six to eight hours a day. It is during these trading hours that the maximum activity for the stocks listed occurs. In the US, the best time to trade both the Nasdaq and the New York Stock Exchange (NYSE), for example, is between their trading hours of 9:30 and 16:00 EST.
In the European markets, the London Stock Exchange (LSE) trades between 8:00 and 16:30 GMT. In Germany, the Frankfurt Stock Exchange (FSX) is also at its most active between 8:00 and 16:30 GMT. If you trade binary options during these times, your indicators should generate frequent signals due to the increased liquidity and volatility caused by the busy market overlap.
Forex
Forex binary options can be traded at any time. However, there are specific periods when markets around the world are open. The most important forex markets are London, New York, Tokyo and Sydney, and the best time to trade is when these time zones overlap. Specifically, the crossovers between London and Tokyo and London and New York are significant. The London and Tokyo markets are both active between 8:00 and 9:00 GMT, while the London and New York markets are both active between 13:00 and 17:00 GMT.
Certain currency pairs will be better to trade during different crossovers. If you wish to trade GBP/USD or EUR/USD pairs, the ideal time will be during the London/New York crossover. Pairs such as GBP/JPY or EUR/AUD would be best traded during the London/Tokyo Crossover.
To a lesser extent, the crossover between Sydney and Tokyo is also a good time to trade. It occurs between 00:00 and 7:00 am GMT and some non-Western currency pairs will be best to trade at these times.
Commodities
When it comes to commodities, the best time to trade binary options is when the markets are most active. This will vary from product to product. Agricultural commodities are ideally traded during the hours of the Chicago Mercantile Exchange (CME), for instance, between 9:30 and 13:15 EST and again between 18:00 and 7:15 EST. Precious metals are typically most active between 8:30 and 17:00 EST, while the best time to trade binary options for natural gas and crude oil commodities is between 9:30 and 15:00 EST.
Indices
The best time to trade binary options for indices is during the same trading times as their related stock markets. The NYSE Composite, S&P 500 and the Nasdaq 100 are best traded between 9:30 and 16:00 EST, for example, while for binary options on the FTSE 100 and Xetra Dax, the key time to trade is between 8:00 and 16:30 GMT. Binary options for indices in Asia such as the Nikkei 225 are ideally traded between 9:00 and 15:00 JST.
Best Times To Trade By Location
UK/Europe
In the UK and across Europe, the best time to trade binary options is during the standard trading day. Typically, this begins around 8:00 and ends around 17:00 GMT, though the most active times will vary according to the assets you are trading.
It is worth noting that from around 13.00 GMT onwards, the US markets are also open which brings even more trading volume on any given day. If you wish to trade forex pairs such as GBP/AUD, you will be best-served trading during the London/Tokyo crossover as previously mentioned.
USA/The Americas
In the US, Canada and the rest of the Americas, the best time to trade is when the markets are active. If you are interested in shares and like to trade American and British stocks, the highest trading volume and ideal time to trade will be between 8:00 and 12:00 EST. This window should allow you to make use of both low and high-volume strategies.
South Africa/Africa
In South Africa and the rest of Africa, there are periods of low, normal and high volatility. Try to avoid trading during periods of low activity, which usually occur between 23:00 and 10:00 SAST. Periods of normal volatility are the best time to trade, typically these are between 14:00 and 23:00 SAST. Volatility can increase due to economic events and other news stories, and the markets can be particularly unpredictable during these hours.
Japan/Australia/Asia
The best time to trade binary options in Japan, Australia and the rest of Asia lines up with the crossovers of the various markets. Forex pairs like JPY/AUD will trade in decent volumes when both Tokyo and Sydney are open, while for those involving GBP and EUR, the ideal time to trade binary options is between 8:00 and 9:00 GMT when the London market is also open.
Stocks work in the same way, with the crossover periods being the most active and therefore the most popular time to trade.
Trading Tips
Strategies
Implementing a strategy will almost always increase the likelihood of profitable trading. Having a solid plan enables you to trade more effectively and removes emotion from your decision making. There is no single best strategy. Every trader should develop their strategy according to their appetite for risk, the amount of time they can spend trading and any other factors that affect their decision making.
With any strategy, it is also important not to take on too much risk. Many traders implement a 1% rule when they start investing, which states that they won’t invest more than 1% of their capital in a single binary options trade.
Indicators
Most successful traders will use charts and indicators to supplement their strategy. Indicators can be set up to generate signals that identify potential trades to place. Get started by using a candlestick chart, as it is accurate and easy to use. The Relative Strength Index (RSI) is a particularly useful indicator. It will illustrate whether a market is overbought or oversold, and can be used to identify market reversals.
Getting Started
If you want to know how to trade binary options in the USA, Canada, the UK, Europe, India, Nigeria or Kenya, this simple guide for beginners will get you started. And while it is difficult to trade consistently without experiencing losses, by following these steps you can get started without the need for a PDF on Nadex, MetaTrader 4 (MT4) or MetaTrader 5 (MT5).
Whether you are trading binary options using a 5 seconds, 1 minute or 5 minute strategy, this simple tutorial will help you to capitalize on the best time to trade OTC currency pairs, bitcoin, and many other assets:
- Step 1: Choose a binary options broker to trade with. While researching, compare factors such as the minimum deposit amount, typical payouts, level of customer support, and whether they offer a demo account.
- Step 2: Develop a strategy that suits your trading style. Ideally, you should test your approach on a demo account first to see how successful it is.
- Step 3: Set up charts and indicators. These will generate signals and highlight trades that are likely to earn profit.
- Step 4: Make sure you are active during the best times to trade for your region or market and follow a reliable strategy.
When Is The Right Time To Trade Binary Options?
The best time to trade binary options is when the market is in its most volatile and liquid state. This is when most traders are active and trading volumes are at their highest. Specific times will vary depending on the assets you are trading and your location. In general, it is best to trade when there are multiple markets active simultaneously around the world.
If you’re interested in trading binary options, build a strategy and follow our step-by-step guide above to get started. Also see our list of top brokers here.
FAQs
Can I Trade Binary Options On The Weekend?
Yes, you can trade binary options on the weekend for certain assets. For example, cryptocurrency markets are open 24/7.
What Is The Best Time To Trade Binary Options?
The best time frame to trade binary options will vary depending on your location and the market that you wish to trade. If you’re interested in trading stocks, there are overlaps throughout the day between the opening hours of the US, EU and Asian stock markets. Other assets like forex and commodities can be traded 24/7. Consult our article above for a detailed account of when the best time to trade each of these assets is.
Can I Trade Binary Options In The UK, The US, Canada And Australia?
You can trade binary options in the UK, the US, Canada and Australia, although some restrictions may apply. In the UK for instance, it is illegal for brokers to offer binary options, but investors can still trade them at offshore brokers regulated in other countries.
Can I Trade Binary Options On MT4?
Yes, you can trade binary options online on MetaTrader 4 (MT4). Other platforms and sites like Nadex and MetaTrader 5 (MT5) also support binary options contracts.
What Is The Difference Between Binary Options And Options?
With options, the trader has the right to receive, purchase, or sell the actual underlying asset. With binary options, the trader never owns the underlying asset, instead, they receive a cash pay-out if their trade is successful.