Picking the Right Time to Trade

Since binary options can be traded online and the market is open round the clock, a lot of beginner investors think they shouldn’t care much about when to trade. But actually, this is one of the most important factors, and professional traders learn that from experience.

Novice traders think that there are other more important things they need to learn and usually don’t immediately realize the importance of picking the right time to trade. Although this is mostly true about beginners, some more experienced traders also struggle to understand that.

Good timing is one of the basic principles of rational and successful trading. When building strategies, time should be always considered because depending on when you trade, markets generally have certain behavior patterns. If you would like to boost your performance by thoroughly planning time to trade, here are few tips to read.

Timing Tips

First thing to remember is that each underlying asset should be analyzed individually. Whether there are stocks, commodities or other markets, they won’t be similar and you can’t expect them to respond similarly.

Some of the assets might be more profitable if you open long-term contracts while others bring better results as short-term investments. Choosing inappropriate time would be a costly mistake, so be extra careful and don’t think markets are all the same.

When selecting stocks as underlying asset, you should trade around 6-8 hours a day. The best time to trade stock market is when USA and Europe is awake and their stock exchanges are open.

If you want to focus on currencies, you’ll need to first determine what currency pairs you’ll trade. That’s because currencies are most active during work hours in their home country. The same is true about commodities, but in this case you need to look at the countries which are major commodity exporters.

Trading Sessions Overlap

The more investors there are on the market, the stronger can be market movements. This volatility is the main source of trading opportunities. We’ll talk about the time when two trading sessions overlap as that’s when usually more traders enter the market.

Investors in New York and London are the major players in almost any market. Therefore, the best time to trade is when trading sessions of these two financial hubs overlap. You can expect nice volatility during these hours. Trading would be especially thrilling when important economic news is released in US or Canada.

Tokyo and London traders altogether usually don’t affect markets much. When Asian offices get ready to close, first European investors just start to wake up. You can feel this sleepy, lazy effect since markets barely move and therefore don’t provide nice opportunities.

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