Binary Options Time Frames

Binary options time frames

This is a very common question, frequenting popping up in the comment section of articles involving indicators, strategies or trading in general.

Binary options time frames

“What time frame should I use on my charts?” is a good question, but ultimately it depends on your trading style, personality and the type of strategies you gravitate toward.

Here we’ll address these issues so you can focus on the time frame that is right for you, saving you from frustration, wasting time and maybe even some losses.

What You Have Time For

In order to determine what time frame to watch on your chart, you must first assess how much time you actually have each to look at your charts.

If you only have 20 minutes to check out charts after you have worked a full day and most of the major markets are closed, day trading isn’t a viable option.

Binary options time frames

Therefore, you’ll need to focus primarily on 4-hour or daily charts which allow you to see longer term trends so you can base your trades on those. You’ll most likely have to be a swing trader, or longer-term trader, with trades lasting several days to a few weeks in the latter case.

If you have a few hours during the day to dedicate to your charts, while major markets are open, then you have a few more choices.

If you like sitting in front of your computer and actively trading with “your finger on the trigger” so to speak, then a watching a short-term time frame, such as a 1 or 2 minute chart is likely ideal.

Binary options time frames

This time frame will give you the most trade set-ups for the time you have.

If watching every tick of the chart drives you crazy, then you’ll likely want to use a 5 or 15 minute chart.

You’ll still likely get some trade signals, but not as many. You’re able to utilize your time effectively, but not drive yourself insane.

It’s worth noting that while some markets like forex are open 24 hours during the week, there are some points in that 24 hour period which aren’t worth trading.

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If you are trading forex pairs like the EUR/USD or USD/JPY, you want to make sure that either the European and/or US markets are open when trading the EUR/USD or the US or Japanese markets are open when trading the USD/JPY. When at least one of the markets in a forex pair isn’t open, price movements can be very random and thus not ideal for trading.

Your Strategies

Trading requires well defined trading plan and strategies.

Without a strategy a trader is just throwing darts hoping they hit something–which isn’t viable over any length of time.

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So hopefully you have come up with or found a few strategies that you like. Likely these strategies are best applied to certain market conditions, certain times of day or to a certain time frame.

Some strategies are easily adjusted to almost any time frame, while others will only work under specific conditions. For example, there are strategies designed specifically for the few minutes surrounding when a market opens.

Binary options time frames

Trying to apply such a technique during the middle of the day is likely to be a losing proposition.

Analyze your strategies and determine what the best time frame is for those strategies.

Hopefully what you have time for (section above) and the time frame your strategy requires align. If not, you’ll need to find another strategy until you have more time to dedicate to trading.

No One Time Frame is Perfect

The sections above hopefully helped you narrow down what type of time frame you should be watching.

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Ultimately though there is no perfect time frame that will suit everyone. Some traders are successful trading off tick charts, while others off 15 minute or daily charts.

This is where I will throw you a curve-ball.

It is recommended that you don’t only look at one time frame. While a 1-minute or tick chart may show you a lot of information about very short-term movements, they don’t show the overall trend of what you are trading.

Time frame and which charts to analyse

A daily chart, may show the overall trend, but isn’t good for picking out intra-day entry points. Therefore it is recommended that traders don’t get addicted to only watching one time frame.

Binary options time frames

Instead, look at two or three time frames.

Short-term traders can view a 1-minute, as well as a 15 minute and 1-hour or 4-hour chart. The 1-minute provides entry and exit signals while the 15 minute and hourly make sure the trader is acting on more complete information about the trend and support and resistance levels.

Swing traders and longer-term traders may focus on a daily chart, but can also use a weekly chart for providing a larger context for the trend and support and resistance levels.

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A a 15 minute (for example) chart can also be used for fine-tuning exit and exit points.

Looking at more than three time frames becomes cumbersome, and likely counter-productive.

Final Word

Since there isn’t a “best” time frame to use on your charts, focus on a time frame that works best for you.

What is best for you will depend on how much time you have which in turn affects what type of trader you will be.

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Then you need to make sure your strategies are aligned with the amount of time you have, and your personality. This will help you determine your “main” time frame, but ideally you should also look at one or two other time frames as well. This will provide you with more information about the asset you are trading, such as which way the short and long term trends are moving, and where important support and resistance levels are.