Expiry Time Types for Binary Options

Attitude is clearly one thing that every binary options trader must consider in performing trades. The attention that should be given to market sentiment varies from asset to asset, and trading instrument being utilized. There are many factors that weigh in the decisions that binary options traders make that pertain to the marketplace. Expiration time is most definitely a factor that will have a big effect on binary options trading. Subsequently, trading must not be based completely upon numbers, as binary options traders need to have a feel of the market, and himself, to make the right choice.

Many binary options traders make use of different expiry times as part of their strategy. Binary options brokers offer a variety of expiry times, from as short as 60 seconds, to as long as a weekend trade. The difference of these expiry times play a significant role in the amount of profit that a binary options trader can obtain, and the amount of investment and risk involved. When traders opt for longer expiry times, the returns can be more profitable, but the risks are also greater.

It is important to choose expiry times carefully. Most binary options traders, especially those who are new to trading, choose expiry times arbitrarily. However, as they get the hand of trading binary options, they soon learn the importance of choosing the right expiry time for their investment, in accordance to their trading styles. Those who want to feel the rush of earning huge amounts of profits in a short span of time choose shorter expiry times, but their risks are also increased by some factor.

Knowing when to post a trade and what time to choose is something that a trader learns over time. Binary options brokers offer a variety of charting tools that allow the trader to make informed decisions and make significant profit. We are dedicated to helping you.

Expiry Time Divisions

New binary options traders often ask “What specific chart timeframe should I be focusing on?”. There are different expiry times provided by different binary options brokers. Here are some of the most popular times included in many platforms.

  • 60 secs
  • 2 mins
  • 5 mins
  • 15 mins
  • 30 mins
  • 1 hr
  • end of day
  • 1 week
  • 1 month

It should be noted that lockout periods range between as low as 2 or 3 minutes up to 15 minutes depending on the asset choice and the type of trade. A binary options trader may be trading 30 minute expiries, but the lockout is 5 minutes, so the trader is actually trading in a 5-minute trade, not a 30 minute trade.

When entering trades with short expiry times, the binary options trader needs to research marketplace sentiment very carefully. One situation for a short time period may be when marketplace conditions are optimistic, or perhaps pessimistic. Binary options expiration times may be as short as one minute. It should be worth noting that this is probably not enough time for a significant changes in price values to happen. Nevertheless, whenever making use of shorter expiry times, it is important to know the returns and risks that go with it,

Expiry times that last anywhere from one day to a week, or longer will demand a different kind of attention from the trends in the market. When trading binary options using these expiration times, the primary focus must consider all market trends within the past few weeks. As with any perception on expiry times and other binary options factors, there are no guarantees that reversals won’t happen prior to the expiration time. However, it should be deemed useful to see if marketplace conditions have persisted in being either bullish or bearish within a considerable time period, as this is viewed as a very robust signal.

Viewing Charts for Expiry Times

The charts you use in different binary options platform should adhere to the expiry times that you chose to trade in. Experience binary options traders use two (2) chart timeframes lower than the expiry time. The reason behind it is this: One timeframe lower than your expiry allows you to see the current price and how far away the expiry is. It therefore helps you to determine how much leeway your trade has before expiry. Using two timeframes lower than your expiry will give you the precision and accuracy on the trade entry, increasing your leeway.

For example, a binary options trader trades 15 or 30 minute expiries. For the 15 minute expiries, the trader uses 1 or 5 minute chart timeframes, and 5-minute or 15-minute chart timeframes for the 30 minute expiry.

Zooming Out

As a general rule, when binary options traders are in doubt, zooming out gives that trader the bigger picture. More often than that, binary options brokers’ charts are zoomed in too closely. Focusing only on the past couple of hours of data is a common mistake that binary options traders do. This could be analogized to a horse with blinders who is only able to see a limited view of the current price trends, instead of looking into a bigger picture.

There are reasons for the binary options trader to zoom out. The price range and times from a zoomed-out view gives a clearer perspective of trends and other underlying factors that affect asset price. With this in mind, it is advised to zoom as far as the last point where candles still look like candles instead of bars in a bar chart. Alternatively, a binary options trader could also switch to a higher time frame, although this will entail an entirely different stratagem for the trader.

Example of a 30-minute Expiry Time

Below is an excerpt of a EUR/USD price chart.

EUR/USD Expiration Periods

The blue lines represent 30-minute expiries. The whole excerpt therefore represents 5 hours of trading. 5 hours could be a decent amount of time to look into. However, it is not a great view for longer trading times such as end-of-day trades. This chart therefore is good for the 15 minute expiry or the 30 minute expiry.

EUR/USD - Better View with Lower Timeframe

If you enter somewhere in the region of the black dot, you would know how much time left before expiry (30 minutes). In the region of our example, it can be seen that there is a downtrend for the specific 30-minute interval, and the binary options trader can act accordingly. As we can see, this chart is ranging. But the question is, how much is the price ranging relative to the day’s action? Zooming out once can answer our question.

EUR/USD - Zooming out May Help

The price range of our 30-minute intervals relative to the previous ranges shows us that the previous view is not representative of trends for longer trading times. Zooming out again shows us a bigger picture, where we can see now that our previous price ranges is relatively steady compare to longer expiry times. Our 30-minute changes are relatively small compared to the big downtrends seen on the left.

EUR/USD - Comparing to Bigger Picture

This teaches binary options traders that they should not trade like horses with blinders. Knowing the general trends of the asset you are trading gives you the edge to make more informed predictions, which will lead to more successful trades, greater profit, and less risks.

Let us provide you with more useful insights like these in our succeeding articles. Stay tuned. In the meantime, why don’t you check out our list of recommended brokers, and see which ones you are most comfortable with to start trading.

Read more articles on Education.

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