Binary options offer the possibility of trading virtually 24/7; however, what few explain is that the days and times for trading can make a difference in a trader’s performance. Since this market is directly related to the activity of exchanges and traders, knowing the best days and times can make a difference.
Traders’ happy hours are when many people are simultaneously active in the market. It’s just like in real-life traditional markets. The more sellers and buyers, the higher the liquidity and volatility. This dynamic is crucial for short-term positions. It helps the option reach the target price before expiration.
The trading curve is not uniform throughout the days. This is because companies in different countries open and close at local times. Traders need to adjust to these times to act when interest increases.
Unlike local stock exchanges, which have defined opening and closing hours, trading currency pairs available on binary options brokers has a significant advantage, as it operates 24 hours a day.
Remember the geography classes? They make a difference here
The lessons on time zones will help you determine the best time to trade binary options. In case you don’t remember, don’t worry, we’ll explain:
Due to the Earth’s rotation on its own axis, the sun shines at different times around the world. As a result, it’s not possible for all locations to use the same time, and to ensure that everyone experiences mornings and nights as expected, time zones were created, usually varying by 1 hour each.
There was a convention that London would be the center of this marking, and for this reason, time zone 0 was marked there. From there, the further east, the more hours ahead would be added, and the further west, the fewer hours.
England has time zone 0, while Brasília time (which governs most of Brazil) has time zone -3. Just be aware: the time zone can be altered by changes such as daylight saving time.
Analyze the stock exchanges and their respective time zones
Now that you know how time zones work, let’s talk about the market: one of the main conditions for having good opportunities in the market is to have a large number of people trading simultaneously.
The major players in the financial market tend to trade assets from their own countries or nearby, and since these players are institutions, they aim to trade during business hours, and most other market participants tend to follow suit.
For example, an asset with the British pound (GBP) tends to have its largest number of people and institutions trading during the hours when the local exchange is active.
Therefore, if you intend to trade a currency pair containing the British pound (GBP), the best time to trade binary options is when the London Stock Exchange is active.
Pay attention to the time zones, especially in four of them
In the example above, we mentioned the case of the British pound and the English market, which, if you didn’t already know, is one of the four most important financial markets globally, followed by the vast majority of European traders and institutions.
In addition to London, there are three other major time zones that host important players in the financial market: New York, Tokyo, and Sydney.
Thus, we can conclude that there is no single best time to trade binary options, but there may be more than one, depending on the assets you want to trade.
Our next step is to help you understand and determine the best times for the markets you prefer to operate in.
New York time zone (GMT -4)
The New York time zone is the closest to Brasília time; therefore, if you prefer to trade during business hours, we recommend prioritizing assets such as the US dollar (USD) and the Canadian dollar (CAD).
Brasília time is usually GMT -3, meaning it is 3 hours behind London time, as explained earlier. New York time zone is usually GMT -4, meaning it is 4 hours behind.
We use the term “usually” because the adoption of daylight saving time can alter these time zones. Therefore, besides reading this article, always check the market hours of the assets you wish to trade.
The best time to trade binary options for assets related to the Americas is generally from 10:00 AM to 6:00 PM.
London time zone (GMT 0)
In addition to the British pound, other assets that are heavily traded during this time zone are the euro (EUR) and the Swiss franc (CHF). Generally, the best time to trade binary options in this zone is from 4:00 AM to 12:30 PM.
So, if you like to wake up early, these types of assets and times may be the best choice for you, as trading opportunities are more concentrated between the early morning and late morning.
Not bad to have afternoons and evenings free, right?
Asian time zone: Sydney and Tokyo
The first two mentioned time zones tend to be more appealing to Brazilian investors, as the time difference is hardly ever more than 5 hours.
For those who prefer to trade assets such as the YEN (Japanese yen) and the AUD (Australian dollar), performing well when it is nighttime in Brazil is advisable, as these markets are usually highly active during that time.
The best time to trade binary options for assets more related to the Tokyo stock exchange is typically from 8:00 PM to 5:00 AM.
As for the Sydney stock exchange, it usually opens a bit earlier for us Brazilians, with its hours typically from 6:00 PM to 3:00 AM.
Assets from Asian markets can be an excellent option to start trading binary options if you work during business hours in Brazil.
What is the best time to trade?
You may be wondering about the majority of assets available in binary options being currency pairs, each originating from a different market.
This is a highly relevant question and will be the highlight of this article.
Some exchanges have such distinct hours that they rarely overlap, meaning they will not be operating at the same time at any point, such as the cases of New York and Tokyo.
When only one of the exchanges trading an asset from a particular pair is open, there is already enough volatility to trade them. However, at various times of the day, these exchanges are open simultaneously, such as London and New York.
And when this happens, volatility increases even more, so we can conclude that the best time to trade binary options is usually when both exchanges trading a particular asset are operating.
Recommended overlapping hours for trading
Your daily entries depend on the instrument.
Stocks.
Imagine that you trade US Stock Options. Be at your desk during the operating hours of the New York Stock Exchange, from 9:30 AM to 4 PM (New York time).
Currency pairs.
Below, you can better visualize the overlaps of the main markets:
Time zone in the image: GMT -05:00 (USA, Canada).
The London and Tokyo zones intersect between 3 AM and 4 AM. London and New York, between 8 AM and 11 AM. Set the alarm for 3 AM if you work with EUR/JPY. For EUR/USD, at 8 AM. For AUD/JPY, at 7 PM. This applies to any other regions.
What is the best time of the week to trade Binary Options?
Experienced traders have noticed that some days are more dynamic than others. The best time to trade Binary Options during the week falls on Tuesdays and Wednesdays. Friday is also a good day. Expect increased activity when the EU and US sessions overlap.
Mondays are generally quieter. However, they follow the two-day break. Many things can happen in the world over the weekend!
Note that these are very rough estimates. Statistics don’t tell you to ignore Mondays and Thursdays. Instead, they advise you to pay closer attention to peak days. Exciting opportunities arise throughout the week.
What is the best time of the year to trade Binary Options?
There are no preferences regarding the time of year. All seasons are equally good for short-term investors. Instead, focus on fundamental factors.
The best opportunities arise on days when financial reports are released. Major news also has a strong influence.
Regularly check the news calendar on the platform. It will let you know when important events are on the horizon.
Additionally, is there any other best time to trade Binary Options on IQ Option?
Traders on IQ Option have the privilege of trading over the weekend. This is called trading on the Over The Counter (OTC) market. Individuals can turn to the OTC market to profit when the regular market is less crowded.
Over-the-counter market options on the IQ Option platform have a special label.
Trade when it’s the best time to operate Binary Options!
After reading this article, you can get accustomed to the best times and moments to trade Binary Options by opening a demo account on the IQ Option platform and learning the most interesting trading strategies.
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