Strategy For Market Entry During Favorable Periods

Strategy For Market Entry During Favorable Periods

The timing of market entry is critical when trading binary options. The decision of when to enter the market can easily determine whether a trade finishes in or out of the money. Within some platforms, it will be possible to trade certain assets 24/7. In others, trading will be limited to a specific period of time each day. In either case, there will be hundreds, possibly even thousands of points at which a contract can be purchased. Knowing the best times to do so is a skill that all traders need to have.

Each market session will have peaks and troughs, as the levels of buying and selling are always changing. Markets also tend to behave differently at certain hours of the day, such as right after opening and just before closing. Generally speaking, the best opportunities for entry will come when trade volume is high. Lots of activity can lead to price trends which are easily identifiable and easy to profit from. On the other hand, flat movement can also be profitable when the correct instruments are utilized.

The highest overall global trade volume comes during times when market hours overlap. Overlaps are simply time periods during which more than one major market is open for trading. One example of this are the United States and United Kingdom markets, which are open for operation at the same time for a short period each day. This is just one example, however, and a quick check of market hours (or a Google search for market overlaps) will provide you with all the information you need to know.

Favorable periods may also be produced by market data releases. Each time an earnings report or economic data report is released, one or more assets will be impacted. Many traders choose to enter the market exclusively just after these reports are released. An economic calendar will tell you not only the days and times for the release of this information, but also what the current and expected numbers are. When the new data does not match expectations, price movement can be expected.

The aforementioned data will need to be linked to specific asset groups and underlying assets. For example, earnings reports will be directly linked to stocks, and then the specific company that offers the shares. Economic data may impact indexes, but can also impact the price of commodities and currency pairs. There will be other specific reports to watch for, such as oil production levels, which will directly impact the price of crude oil. For the new trader, it will not take long to be able to recognized which reports will impact specific underlying assets.

No one is going to be able to trade around the clock, and each trader will have his or her own time-frame for trading each day. Over time, it will become quite clear which times of the day are most favorable for market entry based upon your personal style of trading. Typically, you will want investors to be actively buying or selling, launching prices into motion. However, do not overlook instruments such as Boundary and No Touch, which can provide the same substantial profit levels when market movement is flat.

3 Responses to “Strategy For Market Entry During Favorable Periods”

Leave a Comment

Contact Us - Terms & Conditions - About Us - Privacy Policy - Cookie Policy
General Risk Warning: Trading Binary Options carries a high level of risk and can result in the loss of your investment. As such, Binary Options may not be appropriate for you. You should not invest money that you cannot afford to lose. Before deciding to trade, you should carefully consider your investment objectives, level of experience and risk tolerance. Under no circumstances shall we have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to Binary Options or (b) any direct, indirect, special, consequential or incidental damages whatsoever.
en English