WHEN TO TRADE OPTIONS

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When To Trade Options Finance Illustrated

Trade Options At High Volatily

Knowing when to trade binary options will greatly increase you chances of making great profits. Trading is open 24 hours a day, 5 days a week. But that definitely does not mean you should trade and any given time of the day or night to try and make profits!

Different days, and different times within days see different trade volumes and liquidity. High volatility gives you the chance to get the best returns on your trading.

Market Overlaps

There are several great financial hubs in the world. So it makes sense that the financial market as a whole is most active when these great hubs trade at the same time. These times are known as market overlaps.

For example, when the trading sessions of London and New York or Hong Kong / Sydney / Tokyo / London overlap, then the market volume of trades are much much higher.

Also, when you have more than one active market, then increased market volatility will likely come with it. For a trader, that means that price moves occur in a more predictable and clear direction than when there are low volumes.

That also means that it becomes more likely that your analysis is correct, if you also use longer time frames. When it is low volume time or “off peak” trading hours there is very little price movement of volume (also called liquidity). That results in the opposite situation, where trends become harder to predict with accuracy. That, in turn, increases the risk to your capital.

Best Days to Trade

Research shows that the largest movements is the major currency pairs and commodities happen on Tuesdays and Wednesdays. Fridays are generally busy trading days as well, as many large traders will try and close their positions before 12:00 pm that day. The second half of Friday is typically much lower volume than the first half.

 

A market overlap is when:

The highest volume market overlaps occurs when which two trading sessions overlap?

The days with the highest trading volumes are: