How to choose an expiry time when trading binary options?

Most traders come to believe that trading binary options A bit easier than the classic forex market trading. Nevertheless, in binary options trading, there are a number of difficulties related to the choice of the expiry time of the option, as a mistake made in the selection, most often leads to losses even with a correctly conducted analysis and competently planned work of the trader. Let us try to bring clarity to the matter of determining the expiry time when trading binary options.

Dependence of binary option expiry dates on trading style

• When trading binary options for the long term (a month or more), there is no difficulty in determining the expiry time. It is determined on the basis of the timing of events expected in the future. This can be the expiry time currency intervention, changes in monetary policy by the Central Bank, and so on.
• In medium-term trading (from a week to a month), you should focus not on fundamental economic events, but on the results of technical analysis. In this case, the optimal choice would be a period of two or three weeks, that is, the average time of existence of a medium-term trade.
• In short-term trading (up to 1 week) it would be logical to determine the expiry time within a few days. There is one essential point here - it is recommended to finish trading binary options before Friday evening, because over the weekend some events can happen that seriously affect the market picture.
• For intraday binary options trading, the optimal expiry time is the end of the trading day, as all fundamental factors for today are already played out and the market enters a stagnation phase. When trading faster options, the expiry time should be at the end of the trading hour.

Choice of period for trading binary options

So what period should a beginner choose trader for profitable binary options trading? Taking into account the fact that short-term trading options, as a rule, are accompanied by the lack of significant trading information, as well as a significant share of excitement, then the best choice will be binary options, the expiry date of which is not earlier than the end of trading days.

To achieve more profitable and stable results when trading binary options, it makes sense for the novice trader to try medium and long term trading. It is highly discouraged for beginner traders to use a very short term in binary options trading, as it can lead to a gambling attitude and financial losses. Using tick options at all by beginners will be like playing in a casino.

Dependence of the signal processing time on the trading tactics

Along with all of the above, it can be noted that traders often calculate after how many bars the open trade will start to work out, which is also a very good way to choose the expiration time of the option. Roughly speaking, for this it is necessary to estimate how many bars will be needed to realize the idea, multiply it by the used timeframe and then buy an option for the resulting time.

It should be remembered that certain trading tactics involve different time required to work out the trading signal:

• The fastest way to work out a trading signal is to trade on a candlestick pattern - 2-3 candles.
• Trade on the rebound from the level also implies a quick expiration time - 3-4 candles.
• Trading binary options using breakdown certain levels requires a little more time for the signal to work - up to 10 candles.
• The longest period is trend trading, because you have to take into account a possible correction. In this case the expiry time of the options should be chosen within the range of 20-30 candles.
• When trading with the use of fundamental factors, the range of expiry times for options is very wide. For example, when trading on the news it can be a few minutes, when trading on targets that have been defined by the Central Bank - up to a year.

To summarize, you can see that the expiry dates of binary options can be anything. However, before you buy an option, you need to answer your own question - why are you buying an option for such a time. It's very important to realize that your trading style and tactics determine the term of your options. Understanding this relationship will be the key to your consistent and profitable binary options trading.