What Is an Option

The process itself is referred to as trading, and the people who conduct the process are called traders or private investors. Traders can buy or sell their chosen asset for set time intervals. If the forecast comes to fruition, profit accrues which can equal up to 90 percent of the initial investment.

This financial tool doesn’t require a thorough market analysis of assets as is necessary on Forex, for example. To that end, you don’t need to worry about what points the rates pass on the chart, one will be enough. But that is not to say that it all comes down to dumb luck. So, to begin trading, you need to:

1. Select the period of expiration (meaning the duration of the trade)
2. Identify the asset’s value
3. Forecast future price movements on the chart; down or up

And once you’ve come to a decision, select whichever trading strategy best fits the specific market situation.

Do You Have to Trade on an Active Market?

Is an active market a necessary prerequisite for trading profitably? Or are there some other ways to trade on quiet, “flat” rates? Of course, to always turn a profit, traders must have a strong grasp of the various trading conditions and place trades at a tempo that suits the situation, basing each trade on an applicable strategy.

So, as we have previously outlined, in the binary options market, it doesn’t matter how far the asset price moves in the correct direction. Even if the asset price only moves one point in the forecasted direction, the trader makes a profit, the amount of which is predetermined.

However, it’s not that simple. To achieve the best possible financial results, it is not only vital to use a suitable strategy but also to select the optimum time for its use. When you enter a trade has as much impact as your chosen trading system and the price that you take when opening the trade.

Moreover, if you are not trading at suitable times of day, the vast majority of strategies are pointless; nothing will come of them. To put it simply, the price on every asset chart fluctuates differently depending on the time of day and which day it is.

And this must be factored into your forecasts, as this is the only way to properly understand tempo: how far the price range fluctuates within a minute or several hours, as well as when that fluctuation begins. This is why every trader should work out the best trading time for them.

Some will prefer an extremely active market, and others more quiet periods, when rates are “flat” or move horizontally. The latter tactic is often chosen by beginners who still have a fear of fast-paced trading that requires extreme concentration and instant reactions to market shifts on the asset chart.

The Best Periods For “Flat” Trading

Asset prices spend a great deal of time being flat or moving horizontally when the rate movement remains in a defined corridor without any clear upward or downward trend.

The rates fluctuate from support levels to those of resistance, then back again, leaving their overall movement to appear nearly horizontal. The following example, a screenshot from a trading platform, depicts a typical flat rate movement:

This flat period, beautiful in the eyes of some traders, can last long enough at certain times that experienced traders take advantage of the situation to place lucrative trades. The continuous price movement of the AUD/USD is shown in the screenshot, remaining within a price corridor.

It moves virtually horizontally; the rates do not make any sharp movements. The points of entry are marked by circles and the direction of each trade with arrows. Traders should always have a trading session schedule at hand to assess the ideal time to trade.

This helps work out the optimum time for flat trading. The international currency trading schedule plays a leading role in the formation of intensive price fluctuations on the charts of various trading tools. And there is an even more pronounced influence on those charts when the currency in question is actively in session.

When you have selected an asset as well as when you plan to trade it, it follows that you should also take into account time differences and seasonal schedules. When the exchange opens, as a rule, intensive price movements are visible on the charts of assets tied to that exchange.

Flat trading in those periods is impossible, as there is a significant market entrance of traders buying or selling securities, currencies, and so on. Therefore, their price rate fluctuates due to the increase or decrease of stockholders. These volatile periods also occur at market close, as large numbers of trades are placed, changing the value of the asset, and therefore its price.

When is it best to trade? Well, in terms of days of the week, Monday can be considered a day of flat price movement, due to the lack of trading over the weekend, so when the market reopens there is no extreme market movement. See for yourself, and be certain that if you conduct chart analysis on Monday you won’t see intensive unidirectional movement.

There isn’t much macroeconomic news released on the first working day after a weekend, so that day tends to experience the least extreme market movements. Therefore, Monday is often suitable for flat trading strategies. As is nighttime on any weekday.

However, on holidays (especially over Christmas and New Year – say December 20 to January 5) the market behaves less predictably during typical flat periods. Even if at first glance it appears stable and generally flat, periodically there are seemingly unexplained sharp price moves on the chart.

As financial injections in trading over the holiday period cause spikes (that never level out), trading on those days can be completely unpredictable, leading to a greater possibility of traders losing a significant proportion of their funds. For that reason alone, it is worth taking a break from trading and relaxing, just like everyone else.

Considering all the factors listed, in conclusion, it is possible to trade lucratively on the binary options market even when price movement is flat, and this is, in general, true for all assets. However, a large number of currency traders think that it is too risky to trade over flat periods, as when the exchange re-opens it is not sufficiently clear in what direction the price will move.

That is undeniably true but only with forex and the stock exchange. As the number of points that the price passes isn’t important when trading binary options, the final profit isn’t affected in any way.

Simply described, the strategy is this: when the rate falls to the lower border of the corridor, expect an upward reversal and “BUY.” When the rate reaches the upper border of the corridor, a downward reversal may be likely, so you should “SELL.”

A Flat Indicator Trading Strategy

To increase the overall profitability of the system, trading indicators are additional signal tools that you can take advantage of. All the screenshots below are taken on the platform, so all the necessary means of automatic analysis are present. The first indicator that we apply to the rates is Bollinger Bands (with all of the parameters that come with them):

The second signal tool that is necessary is the Moving Average:

Select the Weighted Moving Average and set the period as 1 as well:

The recommended period of expiration for the trades ranges from 1 to 3 minutes. To follow money-management guidelines in this situation, we abide by the classic principle that any one trade should not account for more than 3 percent of your total funds.

It is also worth keeping in mind that trading must be suspended for about 5 minutes before the release of important macroeconomic data.

BUY:

• If the Moving Average is moving toward the lower wall of the corridor, breaks through, then reverses (see screenshot below).
• During the return, a rising green candle will appear:

SELL:

• If the Moving Average is moving toward the upper wall of the corridor, breaks through, then reverses.
• During the return, a falling red candle will appear:

It is very simple, yet can be very profitable.

Simply follow those movements for 2-3 months, then analyze the results, focusing on the days of the week, the time of day, and other parameters. For several assets, there are certain days of the week when you should avoid trading them. Regarding the daily analysis, note when the sessions open and close to work out the optimum time to trade.

Basing the trading strategy on the results of your analysis will hopefully improve your overall trading results. Using these recommendations, you can not only isolate the most suitable periods for trading but also start striving for the maximum profit possible.

General Risk Warning: binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.