How to choose the expiration date?

How To Choose The Expiration Date?

How To Choose The Expiration Date?

If you’re still new to binary options trading, guessing when your trade should expire is probably one of the trickiest things to master. It doesn’t matter if you know how the market will behave if you don’t know when that behaviour will occur. That’s why we think it’s necessary to discuss this in the educational part of our website. In this article, we are going to show you how to choose the expiration date of your trades, so that you can increase the accuracy of your initial trades. Once again, this is primarily meant for beginners, but maybe some more experienced traders can find it useful, too. Let’s get started.

How to choose the expiration date? | Get some info

So, how to choose the expiration date? First and foremost, you can’t choose it blindly – your choice has to be founded on facts. In other words, you need information on upcoming Big Market Events because these events have the biggest influence on the market. If you know that a big market event is coming, then you also know that the prices will become very unstable in its aftermath, since it takes time for the market to “swallow” new information. At the same time, you also know that the market should remain fairly stable prior to a big market event because everyone will be preparing for the upcoming information. That’s the period you should aim for if you have a plan to trade in fairly long terms. However, there’s more to discuss if you want to know how to choose the expiration date, so stay with us.

How to choose the expiration date? | Plan ahead

Probably the most important tool you can use in this case is your Economic Calendar. It contains information on all scheduled market events in the foreseeable future, so you can easily come up with your strategy. Examine it during the weekend, when the market is closed, so that you can get a glimpse of how the market will behave. Try to pinpoint major events and where they will occur, so if you know, for example, that the following week in Europe is going to be calm, you may want to open trades related to assets from that part of the world. Naturally, if you, for example, see that the US is heading into a turbulent week, you might want to avoid investing there or at least set a longer expiration date, so that the situation can calm down.

How to choose the expiration date? | Conclusion

If you’re worried about how to choose the expiration date, don’t be – once you get the hang of it, it will become second nature to you. In the meantime, however, try to pay attention to some basic tips. Information is your best friend here and the right information can tell you exactly how to choose the expiration date for your trade. Just invest a little effort into planning these things out, and you will see a significant increase in your success rate.

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REFERENCES:

1. Binary Options Trading Strategies (Alex Nekritin – 2012)
2. A course in financial calculus (A Etheridge – 2002)
3. Responsible Excellence Pays! (Fussler, Claude-2004)
4. The Mathematics Of Money Management: Risk Analysis Techniques For Traders (R. Vince, 1992)
5. Encyclopedia of Chart Patterns (T. Bulkowski, 2005)

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Author: Ben Prescott
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