One good thing about trading binary options is that the market is open 24 hours a day. This presents the opportunity to trade anytime and anywhere whenever is convenient. Unfortunately, not all hours of the day are the same – and most especially, not all hours of the day are profitable for a trader. There are many factors involved when it comes to the best time to trade in a day. In this article, we’ll share with you a comprehensive guide to how you can find the best time of the day to trade. If there’s anything else that’s important to a trader aside from profits, it would be time.
Before you can determine which trading time best suits your requirements, it is important to understand the available trading hours for trading. Currently, there are 4 markets with particular trading hours that each trader should consider. These trading hours are based on the 00GMT timezone.
New York Trading Hours
Open from 8 AM to 5 PM, the New York Market is second to the biggest stocks, and forex platform globally. It is where most of the US traders dwell for the reason that the dollar currency is most involved in all its trades. Since the dollar is very much a very influential currency among other nations, many traders are deeply focused on trading within its trading hours.
Tokyo Trading Hours
Open from 7 PM to 4 AM, the Tokyo Trading Hours is the Asian trading hours where many Asian countries such as Singapore and Hong Kong take part. these countries involve themselves more in currency trading – especially in pairing with other foreign currencies such as the USD/JPY and GBP/JPY. This is an ideal trading hour to consider when you’re dealing with Asian stocks and currencies.
Sydney Trading Hours
Open from 5 Pm to 2 AM, the Sydney Trading Hours is the smallest of the markets globally. Nevertheless, since trading hours open during the afternoon, many traders consider it as an advantage seeing that a lot of traders are finished from work and other engagements during these hours. Thus, they can focus on trading.
London Trading Hours
Open from 3 AM to 12 Noon, the London Trading hours are the most prominent forex market globally. Seeing that London is the trading capital of the world, and contributes 43% of all the trading globally, it leaves a huge impact on the market. It is a great contributor and influencer to what happens in the market, which is why many traders consider these trading hours greatly.
Factors to consider
Here are a few factors that can affect your decision when choosing the right trading hours that suit your needs.
News releases and announcements
Among the important factors that can contribute to your ideal trading hours would be the schedule of news releases. News and announcements play a critical role in the performance of a market. After every significant news is announced, a great impact is felt in the market. With this, you want to make sure that you always have access to the news before making significant trading decisions.
Therefore, choose a trading time that lets you hear or read about the latest news for a reliable fundamental analysis of the market.
The noise simply refers to the disturbance or hindrance that’s keeping you to trade effectively. Some of these noises include work, school, activities, and other engagements. You simply don’t want to trade when you’re busy with these engagements.
So, the ideal time to trade would be at a time that doesn’t coincide or overlap with your other engagements or commitments.
The last thing you’d want when trying to make critical trading decisions is to be halted by a slow connection or even by a power interruption. While simply upgrading to a better connection would be ideal to fix the problem, this solution may not be practical for some. A simpler solution would be to choose a time where the connection is most reliable.
Type of trader
You can also choose when would be the best time to trade depending on which type of trader you are – are you a day trader, swing trader, or long-term trader? Each type of trader has a different strategy and approach to trading. While one prefers to enter and execute trades before and after the trading hours, there is also a type that prefers to trade within critical hours on a trading day.
Another factor that can greatly influence the trading hours is the trading strategy that is being used.
Many trading strategies rely on volatile markets where the movement of the market is very visible. While volatile markets can be risky, they can also be highly profitable using the right strategy. Every market has its own time and pace of reaching volatility. Whether the strategy works for volatile or non-volatile markets, it has to be executed at the right time.
Times to Avoid
You should also be wary about the trading times that can hurt your trading. One time to avoid is at the starting hours of the first day of the week for the reason that this is the time where things go through a reassessment period, and the market tends to start slow during this time. Another time to avoid is during national holidays. Banks are usually closed during national holidays, and banks greatly influence the market – when the bank is closed, there isn’t any transaction.
Likewise, you should stay away from trading when the market is acting strange. When you feel like there is something wrong with the market or when it is moving in a direction without basis, it is a clear sign that’s telling you to stay away from it. Whenever this happens, you should be diligent enough to research about the anomaly – it can be a technical error on your part, urgent news or announcement about the asset, a movement by trading institutions, and others.
Our final thoughts
So basically, the best time to trade would be the time that is convenient and comfortable for you. Start with the market that you want to trade from – whether New York, Tokyo, Sydney, or London trading hours. You can also choose among these markets depending on your location. You can trade more efficiently if you are located close to where the market is happening because you have access to recent news and announcements, and are also in sync with the trading hours of the market.
Furthermore, you may want to consider the factors mentioned in this article for you to be able to choose the best time for trading. An important element that a trader should always consider to ensure profits in trading is time – with trading ‘timing is everything.’
If you want to try the different trading hours of the market, check out the Pocket Option demo account. With this account, you can trade in real-time using virtual funds.
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