The volatility tool for Binary Options -

The volatility tool for Binary Options

Measuring volatility in a market is one of the most important technical analysis matters, because this determines the chances for your transaction to be completed. The volatility represents the volume in the market. When the volatility is high, the investor would find a corresponding partner at any time, so any transaction initiated will be processed fast. In case of low volatilizes, even if the investor wants to sell or buy, he might not find somebody willing to be a partner in this transaction. Volatility is one of the best Binary Options Tools, as long as the investor knows how to use it.

The Volatility Tool: when to use it

The volatility tool in Binary OptionsVolatility depends on many factors. The time of the day is important. The binary options market is opened 24 hours a day, but there are some times when the number of transaction is higher. The Binary Options trading day starts in Japan and Sidney, and while the Asian stock markets are opened, the volatility is average. Even if the traders from all over the world have the chance to make some transactions, this market is usually avoided by European and US traders, because it is influenced by the decisions of the Chinese government, which are sometimes abusive and surprising.

Later, the Middle Orient markets open, such as Dubai and Doha, but those are not markets that give a high volatility. We can say that the Binary Options Tools can be used now, but the volatility is still not enough. The opening of the European Market marks the actual beginning of the most important trading period of the day. The Volatility Tool shows the highest volumes within a day, and this is the period when the majority of traders are sitting in front of their computers, establishing strategies and determining the best methods to use the binary options tools.

At 13.00 Greenwich Time, European traders go for their lunch break. At the same time, the US market opens. Once they get back from their lunch, the traders have to exploit the most volatile period of the day. The afternoon European trading session combines with the morning US session, meaning that the market is at its highest point in terms of volumes. Those four hours are the most important of the day, when the US and EU markets are opened at the same time.

When the EU markets close, the US ones will still be opened for a few hours. Even if the volatility is still high and there is room for some more transaction, this period is quiet, and the majority of traders draws their lines and establishes their strategy for the upcoming days.

Binary Options Tools: how to be used by beginners

The Volatility Tool can be considered as a short-term instrument, but it is also a part of the technical analyze. Of course, this is only a complementary instrument, which does not allow you to establish the trend of the market. This tool allows you to anticipate how fast your order will be processed. Before placing the other, you must anticipate the direction of the chart, and this is made by using other instruments and forecast methods.

The tools used in binary options can be effective, but they are usually interpreted by investors subjectively. While an investor might see a buying signal on the chart, this might be a sign for another investor that he needs to sell. Some might see a triple-shoulders signal, while others might consider it a triple top. This is why the investors have to create a solid strategy that must be followed all the time. This way, they will be able to anticipate the direction of the trend correctly every time.

Leave a Reply