When it comes to Trading Binary Options on Bigger Time Frames, make sure the information that you are using to base your decisions is relevant to trading over that longer time frame. You will have a hard time obtaining the results you desire if you do not take this into account and remain aware of it. What expiration date to choose when looking for a direction for your trade?
There is nothing more paramount when it comes to picking an expiration date for binary options than selecting the proper time frame. It is never an easy decision but one that must always be paid close attention too.
One school of thought says there are certain times you don’t want to trade binary options on a bigger time frame:
If you are picking your entry point or strike price based on five minute time frames then it is not wise to use and end of the day expiration date because the information you used is not pertinent to that time frame.
It is very similar when trading on even shorter than five-minute time frames such as sixty-second-time frames; especially if you are using charts that contain daily, weekly, or even monthly information. It just would not make any sense at all to do this.
Using Longer Timeframes in Conjunction with Shorter Ones
Longer time frames can be used in correlations with smaller time frames as well in the sense that a longer time frame resistance can be solved by going on the 4h and hourly chart, picking an oscillator, and looking for divergences price and oscillator are forming. This has the potential of giving the perfect striking price for your option but also allows a smaller expiration date than otherwise needed.
The key to doing all the above is to have access to a binary options trading platform to do your analysis and the Metatrader is the most popular one. So go over the Internet and find forex brokers that are offering demo accounts and open a demo account to have access to the Metatrader trading platform. Then open a chart on the currency pair interested in trading and put that pair on the following time frames: monthly, weekly, daily, four hours, and hourly. Basically you are doing a top/down analysis picking on each and every time frame the information that was left on the previous time frame. Trading Binary Options on Bigger Time Frames
The key here is the monthly chart as binary options brokers are not offering historical prices back in time but this doesn’t mean that there is no chart. So make sure you trade only the patterns on the monthly chart that can be assumed and imply a forecast on the right side of the chart. Otherwise, you’ll end up chasing a pattern that is not really there given the fact that there is not enough information on the left side of the chart. After all, this is what trading is: forecasting on the right side of the chart based on the info on the left side.
The two recordings that are coming with this chapter in our Binary Options Academy are dealing with setting up the bigger time frames in order to find out how to trade binary options on the smaller ones taking into account the info obtained on the bigger picture.
