Binary options are the latest craze among the financial market traders. These traders use binary options to the best of their advantage trading hourly options to gain maximally. Since the most advantageous aspect of trading binary options is that with the hourly expiring options, traders use them freely. However, there are certain times of the market, which are considered better for trading when compared to other timings. With binary options trading, the concept of extreme volatility does not hold much good, since the difference or magnitude of price change does not have much bearing on the profits. Profits are fixed regardless of the magnitude of price change. Therefore, with hourly expiring binary options, a trader must consider the exact entry to the market, to gain most of it.
As mentioned, with binary options, the volatility is not a great thing because a trader may earn substantially from small changes that occur in the price of the underlying security. Whether, the price of the underlying security increases by 1% or 10% the profits for a Call option would remain fixed. Therefore, a trader should time his trade well, so that he can take advantage of the small price changes. A trader in this regard should look for a market, which is following a trend and going in a particular direction, either up or down. Again, considering this aspect, trading should not be pursued in the first thirty minutes of the opening of the market, since the market needs some time to settle down from the initial furor. Similarly, the last thirty minutes are crucial as hectic buying or selling could bring volatile changes in the price of the security. There is no clear direction of the price in the first and the last session of the market and hence must be avoided. The middle session is considered the best session for trading the hourly expiring options, however, avoiding the lunch hour during which there is less activity again leading to disorganized trade activities.
Just as the hour of the day is important to consider when day trading with binary options, similarly the day for trading binary options also holds importance. The start of the trading week, i.e. Monday tends to be more volatile than other days. Similarly, the end of the week also shows similar trends and often lacks a clear direction. Therefore, a trader should try to avoid the morning sessions of Monday and late afternoon sessions of Friday for the purpose of trading. These are usually the most volatile periods and therefore can lead to disorganized trade.
Although the mentioned timings are valid, these are not hard and fast rules, which have to be followed by day traders. Day trading with binary options is a concept, which is followed by traders who look for quick money and have the ability to judge the temperament of the market. These traders have the required experience to handle the market upheavals. However, it is the new trader, who must take care and follow these norms, in order to avoid a loss in his initial trades.