The debate of binary options vs forex has been going on for years now. Both are trading procedures for investors like banks, stock exchanges, and others. While forex is related to foreign money trading, binary options are more related to financial products.
When you intend to engage in trading, timing matters a lot. You must be extremely careful and strategic about the time of the day when you are initiating the trade. Here we will see the best time to trade binary options. This can yield the most output through profit maximization.
What Is A Binary Option
Binary options are financial products. Every party involved in the forex trading for beginners is entitled to one out of two outcomes. These options have expiry dates.
The binary options are automatically debited or credited in the account of the trader. This eventually means that the trader will either receive a certain amount of payment or lose the entire investment from the trading.
For example, let’s assume that a trader expects the price of a share to increase at a particular time. That trader invests a certain amount higher than the price of the stake. If the stake’s price goes higher at that estimated time, the trader receives payment over the term of the agreement. If not, then the trader pays that amount.
The Best Time to Trade Binary Options
In binary options trading, you trade several assets. From them, you gain profit. There are 3 assets which are stock indices, commodities, and currencies. Apart from stocks, all other trading options are traded on a 24-hour basis.
In the binary trading market, traders gain profit by estimating the direction of the price based on the volatility of the market. The most prominent time to trade is when there are lots of traders crowding in the market. This makes the assets generate liquidity and volatility.
Although commodities and currencies are said to be the 24-hour markets, these 2 assets also have a certain time of the day when the activities are at the maximum.
Therefore, it is evident that all the assets do not follow a particular time zone for traders to be activated. We will now see which time is prominent in trading in a different market for binary options.
Best Time for Stocks
The maximum time stocks are traded is 6 to 8 hours each day. These stocks are usually traded in the US Stock Markets. As a result, the US market is usually determined as the optimum time zone to trade in the stock market. This trading time generally starts at 9:30 am EST and ends somewhere around 4:00 pm EST.
Nevertheless, other markets in Europe should also be considered in determining the optimum time to trade binary options in the stock market. For instance, FTSE and Xetra Dax in Germany are just as important. When you are trading stocks in binary options, it is essential to keep your attention on the stock market that is in operation at the designated markets.
Best Time for Commodities
Commodity markets are usually active throughout the whole day. This means that the activities begin from 9:00 am EST and stay on till around 6:00 pm EST. Some of the commodities may begin trading as early as 8:00 am EST.
You can also determine the timings by grouping the commodities. There are exchanges available in the place of trading commodities. You can group the commodities there. For instance, agricultural commodities are traded in the Chicago Mercantile Exchange.
This exchange is usually active starting from 9:30 am EST till 1:15 pm EST. In addition, you can find this exchange to be active again from 6 pm EST to 7:15 am EST on the following day.
Best Time for Currencies
There are time zones that overlap. These overlapping usually occur between London-Asian time and London-New York time. The forex market is properly active during the time these overlaps occur.
During these active time zones, the local currencies will have more volatility than others. You must be extremely careful about this. For example, the Australian currency will be more volatile during the London-Asian overlap than the London-New York overlap.
You can potentially gain a lot of profit if you can master the best time to trade binary options. The assets usually follow these trends when to comes to being active and volatile. All you have to do is anticipate the fluctuation properly, and you can become a great trader in the binary options market.
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