What period should I use when trading currencies with binary options?

trading-currencies-binary-options-periodThe Forex market has a very high liquidity and is open 24 hours per day, five days out of seven. With binary options, brokers offer a series of currency pairings such as the EUR/USD, which is the most popular. To learn more about the Euro-Dollar, click here.

The Forex market operates 24 hours a day due to time zone differences between the different financial markets. In fact London, the most important market, does not have the same hours of operation as do New York or Tokyo.

What strategy should I apply when trading currencies? Two strategies exist for trading currency with binary options:

Trade when the market is volatile : Normally traders prefer it when there is strong market fluctuation, as trading opportunities are more significant. When exchange volume is more significant in a financial market, the market will be more volatile so the asset’s curve will be subject to strong movement. Depending upon the situation, this will allow for a “ “call” option or a “put” option.

This situation occurs when two financial markets are open at the same time. It is interesting to trade between 1pm and 5pm GMT, which is the most volatile period on the Forex market as it corresponds with the opening of London and New York.

Trade when the market is less volatile : It is possible to trade currencies in a context where the market is calmer. In fact, some traders prefer to negotiate in low periods from 7pm to midnight, GMT. This way, there is less variation and it would be wise to trade in “ “zone” mode.

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