All who trade binary options will need to have the ability to assess just how active the markets are. Unless a specific market is closed for trading, prices will always be in motion. Even so, the level of motion will directly correlate to the number of investors who are actively buying or selling assets. Brisk buying or selling will provide plenty of profit opportunities. However, there are instruments which can be used to generate a profit when the markets are flat.
Instrument selection must include some consideration of the overall volume. Most instruments are geared towards more active markets, but there will be options such as Boundary, Range, and No Touch which can be selected when prices are range bound. High trade volume presents the opportunity for asset prices to move quite a bit throughout a period of time. At times, volume will remain high throughout a session, but it can also rise and fall throughout the day.
In active markets, the easiest profit opportunities are presented when prices are trending. Under less active conditions, prediction may be tough unless the price has remained flat for quite some time. Between these two lies a middle ground within which it will be imperative to select the appropriate asset and expiry time. The good news is that most days are excellent for trading, but bad days are easy to identify and avoid. New traders are advised to keep in mind that avoiding the markets during less optimal periods is an excellent general strategy for fund protection.
There are several binary options strategies which do account for trade volume. A number of these are centered on the increase volume that comes along with market overlaps. Overlaps are simply period of time during which more than one major market is open for trading. For example, the London and Tokyo markets overlap for a period of time each day. Overlaps increase global trade volume, not just because more traders are active, but also because the events taking place in one market can impact the performance of another.
Volume can be predictable at times, particularly just prior to market opening or closing. Markets tend to be most active during the hour just after they have opened, and less active in the hour just prior to closing. Although it will have less of an impact, it is also important to remember that many traders to break for lunch, typically around 11am to 12pm local time. Knowing this in advance can certainly help you to plan your daily trading schedule.
In general, volatile market conditions do require more analysis. When price movement is erratic, look to short-term expiry times as an easier means of profiting. It can be tough to forecast movement over longer periods when volume is extremely high, with the exception being times when trends are occurring. The basic lesson here is to remain mindful of just how active the markets are. The number of individuals who are actively trading at any given time can and will impact the overall level of price movement.