Finding the best markets that offer the most potential for binary options increases your profits. This article explains how to master the skill. Of course, there is no general answer – no market is always better than all other markets – but we provide you with the strategies to regularly identify the right market.
Rule 1: Avoid Small Markets, Search Volatility
Normal High/Low options are short-term investments. As such, they require a lot of volatility. When you predict what the market will do over the next 60 seconds or 5 minutes, you need volatility, or nothing will happen.
Check technical volatility indicators such as Bollinger bands, the Average True Range, or the Volatility Index (VIX). These indicators help you identify markets with high volatility, and find the high-potential environment that increases your chances of winning a binary option.
High volatility is especially important for option types that involve a target price. Traders of one touch options, boundary options, and ladder options will find that a high volatility increases the markets chance of reaching the target price.
On general rule says that small markets are less volatile because there are fewer traders in the market. As a binary options trader, it often makes sense to prefer U.S., European, and big Asian markets over small market such as the Israeli stock index, the TA-25.
Rule 2: Consider Your Time Zone, Avoid Closing Times
The same market can be very different at different times of the day. Near the closing times of the day, markets tend to lose volatility because many day traders have finished their business and are no longer creating volatility. Right after their opening and after big news, however, stock exchanges are often highly volatile.
Commodities and currencies are the most volatile when multiple large markets are open simultaneously, for example when the European and American or the Asian and European opening times overlap.
As a binary options trader, you have to consider these different behaviours at different times. Find the market that offers a high volatility at a comfortable time for your time zone.
Rule 3: Consider The Signs Of The Time
No market always behaves in the same way. Fundamental influences can significantly change how markets move. Pay attention to these influences, and you will always be one step ahead of the market.
Currently, European markets seem the most nervous. The refugee crisis and worries about Trump, which seem more intense in Europe than in the U.S. and Asia, have created a tension that could be ignited by the smallest spark.
American have seen significant gains without a major correction, which implies that a consolidation could happen soon.