After-hours trading used to be open only for institutional traders, but as technology became more widely available it became accessible among traders. Most traders have access to after-hours trading through their online broker. But while access might be common, each broker will have varying rules for its clients.
Binary options trading is a profitable business. Even if you do not have time to trade during the day, you can trade during the night. Many traders who do not have the opportunity to work during the day can always set aside a couple of hours at night to get the coveted profit.
Why do people trade at night? The answer is – lower volatility. After-hours trades can be better because orders get executed at the price you want or better. During day, there is more liquidity in stocks around the times the markets open and close.
Just like New York, the binary option market never sleeps. It is open 24 hours a day in different parts of the world, from 5 p.m. EST on Sunday until 4 p.m. EST on Friday. Different international time zones make it possible to trade over a 24-hour period. Night trading differs from day trading, so let’s discuss its pros and cons.
What you need to know about night binary options trading?
We want to specify that night (after-hours) trading means trading during a specific trading window of four additional hours from 4 p.m. to 8 p.m. Eastern time when the American session has already closed, and the Pacific and Asian ones have not yet opened. During after-hours trading, however, trading is carried out through Electronic Communications Networks (ECNs).
These electronic networks enable investors to buy and sell stocks without the standard daytime market participants. When a trade is placed, transactions make their way through the ECN to await fulfillment. In other words, sell transactions wait for buyers and buy transactions wait for sellers. When transactions match up, those orders are executed through the ECN.
However, in case of binary options it does not matter. The main thing is to determine the direction of the price, regardless of points.
In general, if you decide to trade Euro/Dollar currency pairs, the night volatility will be 3 or 4 times weaker than the day one. No sharp fluctuations, unforeseen reversals, sudden breakdowns of the trend on momentum in the market. Therefore, all you need to do is to choose the right scalping tool and reap the profits.
First of all, let’s set up the workspace and then we will discuss the basic strategy and the choice of instruments.
- For night trading you will need a Japanese Candlesticks or Bars chart. Choose the one that suits you best.
- As assets, it is better to use those that are traded in the European or American sessions: currency pairs with euro or dollar, but without Asian currencies.
- For a timeframe, set M5: in just a couple of hours you can make several profitable trades.
Now it’s time to start trading.
How to trade electronic contracts at night?
To choose to buy options, you need an indicator to display the price channel. As mentioned above, the volatility at night is lower, so the trend movement will be remaining for longer time.
Most traders use Bollinger Bands to cope with the above task. Trading will be carried out with a rebound from the channel borders. The CALL option should be bought when the price rebounds from the lower line of the indicator, and PUT, on the contrary, from the upper one. Average moving in this case is not considered.
Due to the extremely low volatility, the indicator period should be set to 15 and the deviation should be 2.
To avoid the influence of market noise, it is recommended to set the expiration time of at least three candles.
In conclusion, we want to admit that for night trading any trend indicator can replace the Bollinger. Even the simplest Moving Average can be an alternative for trading on rebounds. Pocket Option Broker offers a wide choice of instruments for clients who choose to trade at night.