Most traders prefer the European session due to convenient time interval. Of course, there are exceptions in connection with the difference in time zones, but in most cases, peak number of transactions falls on the day, because basic strategy is designed for tracking the uptrend or downtrend.
Night time (Asian session) is characterized by a moderate flat which traders prefer to ignore — in a horizontal trend and a weak fleeting bursts it is difficult to earn. However, this applies to Forex market, where the earnings of the trader — the difference between the purchase price and the sale of the asset. In binary options, where it is important to guess only the direction of the trend on a fixed time interval – trade at night is a good option to earn.
Trade at night time
The main trading risks arise from volatile market, and the cause of volatility — economic events, news, speculative reaction of the traders. All this is inherent in the American and European sessions. Activity gradually decreases closer to the night. About the earnings with minimal risk in a quiet market I will discuss below.
- Watching the price chart. At a time when volatility in the market is minimal and by most of the quotationsthe horizontal trend (flat) occurs, – get ready to work with the market.
- Allocate the borders of night flat — draw a horizontal line of support and resistance (support — caves, the resistance — peaks). In future the trade will be conducted through the channel of the flat, because it is important that both lines be most horizontal and parallel. General upward or downward trend, is not excluded, but the allocation of channel itself is important.
- The overall strategy is simple: purchase of the options at the time of rebound from the support line and selling — at the time of rebound from the resistance.
In the daytime this strategy is not working, because the activity of traders would lead to the breakdown of levels of correction and a strong price noise. To calm markets, this situation is also possible, but less likely. Besides, this factor can be eliminated by increasing the expiration time.
In case of difficulties with construction of smooth price channel, I recommend the use of Bollinger Bands technical indicator. The figure below shows that this indicator is a direct analogue to the flat channel. The principle of open transactions is similar to the purchase or sale of an option at the time of the bounce from the borders of the price channel.
The period of expiry of the option is determined individually for each asset depending on its liquidity. Liquid asset will be more likely to fend off the upper and lower boundaries of the channel, the expiry time should be shorter than in less liquid asset. The period is easy to determine from historical data at least for the last month.
Average Deposit growth for such a strategy — 10-30% per month. Losing trades make up about 10-20%, because it is important not to increase the deposit on the principle of the martingale. Have any questions left — waiting for their feedback after the article!