“Timing is everything.” This statement is applicable in an array of life aspects. Be it at work, studies, or anything else. For a student, the study hours are crucial. On the other hand, it’s the working hours for a working professional. It is true for trading also. The awareness of trading hours is crucial to trade successfully.
When the trading is in Binary Options, the traders have to be more vigilant. It is since Binary trading happens in fixed hours. It is unlike other forms of trading where the traders can enter and exit at their will. But, even in forex trading, the major markets are scattered at different locations. The ones in Tokyo, Sydney, New York, etc., all have different time zones. Therefore, being watchful about the trade hours becomes crucial there also.
Choosing the best hours would not only give an element of convenience but will also assure better returns. We can understand it by a simple instance; for example, if a trader enters a trade after the trade hours or just before it ends, that calls for a risky move. Moreover, the trade hours can complement your way of trading. For instance, a trader who prefers to trade in volatile conditions would benefit only during the specific trade windows.
Significance of Market Hours
We can understand the importance of market hours by comparing binary and stock markets. In a stock market, the trading hours are fixed. Usually, they last for 9 hours. On the contrary, the Binary market can continue with their trading 24×7. Such a basic difference can cause a huge impact on overall trading volumes. It eventually leads the trader to invest in that kind of market only.
The different time zones play a vital role in deciding market conditions. Binary trading can be done anytime, but maintaining a specific time is essential to gain profits. We can elaborate the idea with a simple example—assume an active investor present at a particular time in America when Binary Options trading occurs in Japan. In that case, there was no point in trying and trading on the American exchange at that time. It resulted in a potential loss of opportunity. Therefore, if time zones are kept under watch, traders can avoid such cases.
At times, a market can experience an overlapping of hours. We can understand it with the help of stock markets. For instance, the three largest stock markets viz New York, Tokyo, and Sydney all follow different time zones. As a result, it is often seen that there is an overlapping of trading hours. It can cause a reduction in the number of trades and the traders. That is otherwise known as the reduction in volume.
Such overlapping of time zones can affect the volatility. It would not move positively, making it difficult for high-volume traders to get the desirable results. Therefore, knowing the market hours is important to avoid such a scenario. On the other side, if the trader is aware of the best hours, they can modify the trading approach to reap the profit.
The Best Hours to Trade Binary Options
Binary Options offers various types of assets. It can include commodities, stocks, currencies, etc. Traders can trade all such assets in Binary Options. Therefore, knowing the best hours to trade them is a vital step. Traders can win trades more efficiently by knowing the right hours.
The hours that can give higher returns should not be ignored. Such hours of maximum profitability will also call for more trader activity. They are especially helpful to increase the volatility and liquidity of the market. Therefore, it also becomes a bonus situation for those traders who trade in high-volume conditions.
The best hours for trading are when the market is bubbling with trades. But, that varies according to the type of asset and market. For example, assets like currencies and commodities should be 24-hour markets. But, a trader can experience the maximum activity only at certain times. That is when there is an overlap of the trading zones. Likewise, other assets demand their own set of research into the timings. However, knowing the most active trading hours can help draw a significant idea.
Before jumping to the best hours to trade in this market, let us understand what all assets come under it. The commodities market is fundamentally concerned with the primary economic sector. It includes raw assets such as Gold, oil, etc. Even cocoa comes under it. It is not concerned with the manufactured products, unlike others. So, the timings that reap the best trades would vary according to the asset. For example, the best hours for trading gold won’t give the same result for oil.
From the analysis of various historical trading data, we can estimate the best timings as follows:
- For Crude oil: It starts at 9 am EST and ends at 2.30 pm EST
- For Natural gas: It starts at 9.30 am EST and ends at 5.15 pm EST
- For Corn: It starts at 9.30 am EST and ends at 1.15 pm EST
- For Gold: It starts at 8.20 am EST and ends at 5.15 pm EST
- For Silver: It starts at 8.25 am EST and ends at 5.15 pm EST
These timings signify the most active hours for the commonly traded commodities. However, the trader should ensure deeper research when it comes to knowing the hours for other assets.
The stocks are known for their working hours, which extend to 6-8 hours per day. When it comes to the stock exchange, NYSE is one of the biggest players. And as a result, the stocks of all major companies outside the USA enter the US stock markets as American Depository Receipts. So, knowing their timing is more important than other stock exchanges. It operates from 9.30 am EST to 4 pm EST.
Additionally, the FTSE operates from 7 am GMT to 3.30 pm GMT. Whereas the Xetra Dax is from 8 am GMT to 4.30 pm GMT in Germany. But when trading stocks in Binary Options, these hours might not be ideal for trading. Therefore, paying attention to the timings of the respective stock exchange with the listing is what matters.
Trading with currencies in Binary Options is a unique method in itself. The timing is per se distinct from others because the standard timing starts with the beginning of the week at 5 pm EST. It commences on Sunday and ends on Friday by 5 pm. Traders should be cautious because all hours are not equally favorable. When one or more markets are open, we can say that the market is most active. It can be an ideal time as there will be a heightened trading atmosphere. It is an opportunity that means more significant flux will be in currency pairs.
But, due to the different time zones, regions may have different start and end timings. For example
New York from 8.00 EST to 17.00 EST
London from 3.00 EST to 12.00 EST
Tokyo from 19.00 EST to 4.00 EST
Despite the difference in the timing, experts believe the best hours to trade in currencies is when there is an overlap.
When Should You Prefer to Trade Binary Options?
Before beginning to trade, a newbie trader must know that different strategies work at different times. Traders can use some strategies better during a fast environment. For example, strategies that focus on high volatility and volume come in handy in such an environment. But, that need not mean others are not effective. Many other strategies work under silent conditions as well.
To understand it furthermore, we can use the example of exhaustion gaps. It is essentially a technical signal. Traders can identify it with a break lower in the prices. An exhaustion gap occurs when a rapid rise in an asset’s price occurs.
It occurs when such a condition persists over several weeks. Hence, it is a low-volume situation. So, the availability of traders in the market will also be less. That paves the way for traders looking for such a chance. If they use strategies in favor of such conditions, they will profit from it. So, a trader with such an approach is advised to look for a quieter market condition and wait for the right hours. It shows us a glimpse of how the right time to trade can bear fruitful results.
To add further, it may get difficult sometimes to find a quieter environment. As a result, finding the exhaustion gap might be troublesome as well. Moreover, that might prompt you to invest in fewer signals or ones with lower quality. Such a choice would reduce the profits. Therefore, a trader must wait for the right trading time. It is in the trader’s best interest to wait until at least one major open market.
Sometimes, finding the best time slot requires practice in trading. So, once a trader masters the standard hours, they can eventually spot a suitable time for themselves. However, the most actively traded hours do come with their benefits. Therefore, starting at the market hours while keeping an eye on specific market timing differences can bear profitable results.