End Of Day Binary Options Strategy
Whilst many binary options day traders look to close out their positions well before markets close, some traders capitalize on the end of day period, which offers opportunities for switched-on investors. This manual explains how to trade binary options at the end of the day, with a step-by-step example, winning tactics, and more.
Binary Options Brokers
What Is An End Of Day Binary Options Strategy?
Investors can open binary options trades right up to the wire, or set them up with an expiry time near the end of the session. End of day binary options traders become particularly active when it becomes clear that the price is going to ‘settle’ or ‘close’, often making trading moves very near to, or after the markets close.
Importantly, an end of day binary options strategy can be particularly effective in trending markets that oscillate between long uptrends and long downtrends and reverse after reaching established overbought and oversold levels.
End of day binary options strategies can also involve using price information and data when the market closes to make predictions on where the asset will open the following day.
Hours
The best times to execute an end of day binary options strategy depend on the market you are trading. For example, the London Stock Exchange is typically open from 8 AM to 4:30 PM (GMT), whereas the Australian Stock Exchange is open from 10 AM to 5 PM (Sydney time). This means the ’end of day’ time and market activity will vary, though the key hour for stock markets is often considered to be between 7 PM to 8 PM (UTC).
The end of day trading is also known as the ‘power hour’, because this tends to be when there is significant trading activity and high volumes, opening up opportunities and tasks.
Indicators
End of day binary options trading is the simplest in markets that fluctuate between long uptrends and long downtrends and reverse after reaching established overbought and oversold levels. Technical indicators can be a great support when executing a binary options end of day strategy, helping to identify trends and patterns.
Simply explained, indicators allow you to gauge if a strong trend is underway meaning you can open positions that coincide with the direction of the current trend. Many platforms offer a suite of indicators available for free download including Moving Averages (MAs) and the Relative Strength Index (RSI).
Practice
The best binary options brokers, including Pocket Option and Nadex, provide free demo accounts so you can practice an end of day binary options strategy in a risk-free, simulator environment. A paper trading account with access to live price data can be the ideal place to test different ideas and techniques before risking real cash.
Keep A Level Head
It is easy to make rash decisions if your plan isn’t going in the direction you planned. Understanding binary options is one thing, but facing the reality of a highly volatile market is a serious test of resilience.
Set clear goals in terms of payouts and profits, document your successes, and have a clear money management plan.
Getting Started
A good end of day binary options strategy often requires an evaluation of price action compared to the previous day or period’s price shifts. If you can establish how the market typically behaves and can confidently identify the momentum in a trade, you can determine entry and exit points for the following day, while also protecting your downside.
How To Trade An End Of Day Binary Options Strategy (Simplified)
- Open a live account with established binary options brokers, such as Quotex or Pocket Option
- Download the relevant trading terminal or mobile app
- Select an underlying asset to trade and identify an opportunity
- Place a high/low or similar trade to take advantage of an upward or downward trend
- Wait for the contract expiry and/or implement any risk management tools and stops
Use this as a template or cheat sheet for your end of day binary options strategy builder:
- Wait for the market to close and the release of any after-hours earnings reports. Remember, closing times will vary depending on the market you are trading
- Review any upcoming news releases or imminent events that could impact the price of the asset, for example, product releases
- Analyze the price data for the full day, plus the previous few days to get an understanding of any underlying trends and patterns. Has there been anything out of the ordinary that oscillates the price outside of typical trends, and if so, why? As per the image below, Bollinger Bands are a great graphical tool to pinpoint price volatility. The bands will update and get narrower and wider as volatility decreases and increases.
- Once you have established the direction the market is moving, open a high or low trade based on where you think the market will be when it opens in the morning or during after-hours trading.
Pros Of The End Of Day Binary Options Strategy
- The end of day binary options strategy is suitable for beginners with plenty of opportunities across multiple markets
- Focusing on daily price action charts rather than intra-day charts can make it easier to recognize overarching market trends
- This style of binary options trading requires less time commitment than other strategies. Traders only need to study charts at their opening and closing times
- Investors benefit from having a full day’s worth of trading data to evaluate and make decisions on. And after the market has closed you have more time to analyze and interpret any signals that developed during the day
Comparison To Other Binary Options Strategies
Let’s outline how the end of day strategy zone compares to other popular binary options strategies:
Intra-Day Trading
The key difference between a binary options end of day strategy and intra-day investing is the frequency of positions. Intra-day investors typically place many trades throughout the day using tick or minute data. In contrast, with an end of day binary options strategy, investors generally place trades towards the end of the session or after the market closes. This makes the end of day binary options strategy popular with traders who have less time or work a normal 9 to 5 job.
Strangle Strategy
The binary options strangle strategy is a direction-neutral tactic used by investors following market volatility. Traders buy out-of-the-money contracts while simultaneously selling in-the-money contracts. Traders usually purchase a call higher than the current price and a put lower than the current price.
This is lower risk vs an end of day binary options strategy. You are essentially anticipating that one side will lose but the profit on the other will outweigh the loss.
Straddle Strategy
A binary options straddle strategy is used when traders believe there will be a strong market move, but the direction of the price shift isn’t clear. Two positions are placed, aiming to offset each other on a directional basis. Investors use these swings to profit, either way of the price movement.
The floor and ceiling mean you will have risk protection in both your long and short position. With this, the strangle and straddle concepts are arguably less risky than trading end of day binary options.
Range-Bound Strategy
Sometimes referred to as boundary options, range options are a prediction of whether the price of an asset will end within a predetermined range. To be successful, you will need a strong understanding of the factors that influence an asset’s value. This is different from the end of day binary options strategy, in which you can be fortunate just by following the end of day patterns and speculating whether the value of an underlying asset will rise or fall.
How To Choose A Broker
It’s important to find an online broker that will best support your end of day binary options trading strategy. Key considerations include:
- Trading Assets – Access to the world’s financial markets will vary between binary options brokers. Can you trade binary options on forex pairs, commodities, stocks, indices, and cryptocurrencies, for example?
- Payouts – Payout percentages should be a key consideration when choosing between binary options brokers. It is important to gain the most amount of profit per successful end of day position. Pocket Option, for example, offers an average 92% payout for trades that finish in-the-money.
- Customer Service – The top brokers that support end of day binary options strategies will offer responsive customer support options. This may include a live chat service or a free local telephone number, available 24 hours a day, 7 days a week. Being able to access an out-of-hours customer support line may be important, particularly if you are attempting to open a position before the markets open.
- Analysis Features – The success of an end of day binary options strategy often comes down to having access to reliable market data. Brokers that connect you to historical price data, customizable charts, calculators, and technical indicators are helpful here. In addition to price analysis tools such as Bollinger Bands, look out for advanced functions such as strategy backtesting, market scanning features and intuitive dashboard features.
- Demo Profile – Practise accounts are a great way to learn and implement new end of day binary options trading ideas. The best binary options tester accounts will provide real-time market data and all the tools you would need when it comes to live investing.
- Education – Having access to learning materials is particularly important for beginner EOD binary options traders. Whether that be through strategy ideation forums from pro traders, simplified worksheets, integrated YouTube videos, books, online quizzes, or PDF training downloads.
Final Word On End Of Day Binary Options Trading
In summary, no one strategy is right for all investors. However as this end of day binary options guide demonstrates, if you know how a market typically behaves and can determine the strength and momentum of a current trend, you have a solid framework in which to assess buy and sell signals. Head to our list of the top binary options brokers to get started.
FAQs
What Is An End Of Day Binary Options Strategy?
A simple definition of the end of day binary options strategy involves finding a trade opportunity and setting a position that will close at or before market closure after reviewing the session’s trading data.
Does The End Of Day Binary Options Strategy Provide Guaranteed Income?
There is no guarantee that profits will be made with an end of day binary options strategy. Although the concept may suit investors with little time or those trading alongside a full-time job, there is still a risk of losing money.
Is An End Of Day Binary Options Strategy Suitable For Beginners?
Yes, the end of day binary options strategy is suitable for beginners. It doesn’t require investors to make a high volume of trades and tactics can be applied to various underlying markets, including stocks, forex and commodities. Use our article to get started.
Which Brokers Allow The Use Of End Of Day Binary Options Strategies?
You can apply the end of day binary options strategy at almost any online broker. However, to improve your chances of successful trades, you will want to select a broker with high payouts, reliable platforms, plus helpful analysis features and technical indicators. These will allow you to identify trends towards the end of the trading day.
What Is The Difference Between An Intraday And End Of Day Binary Options Strategy?
Binary options day trading involves opening and closing multiple positions within a trading day. Investors will typically use live market data whether that be by the minute or hour. An end of day binary options strategy normally involves making decisions very near to, or after the markets close.