by Adil Adeel
When you trade in the binary options market, the tips provided by experienced traders and binary options trading guidelines repeatedly emphasize on the importance of having a trading plan, and for its successful implementation, you are required to have effective binary options trading strategies in place. You should understand that even a good trading strategy needs some time to evolve before it starts providing profitable results in the long run. One such strategy is called “End of Day Trading Strategy” or “End of Day – Daily Trading Strategy.”
What is End of Day Trading Strategy?
End of day trading strategy is very simple but effective in binary options trading. In this strategy, a trader is required to monitor an asset price movement on the chart for an entire trading day or the last two days. Once he spots an opportunity on a chart, he can open a position next day on the basis of his daily price chart analysis.
In this strategy, a trader can concentrate on his trading activity after New York Financial market closes. There is a long interval of comparatively quiet trading, called the Asian session, between the time duration from the close of NY market until the opening of European markets. During this period minimum trading activity, you can carefully read the charts and formulate the trading plan for the next trading day.
With this trading strategy, you can enter the market at any point, for example, if you are planning to enter a position by afternoon, you should thoroughly analyze the asset price charts to track the price movement of current and previous day. This is done to observe the past asset price action, as the signals are very clear on these charts. The reason behind clear signals is the smoothening out of short term price fluctuation that provides a complete picture of price momentum and trends.
Using Time Efficiently
With the end of day trading strategy, traders can efficiently utilize their time, as they can adjust this strategy according to their regular work schedule. Not every trader can sit and observe the market throughout the day, which also increases the risk of over-trading. According to a research, traders who trade less frequently earn more profit on average as compared to traders who trade more frequently.
The probability of signals received at the end of the day is higher than receiving the signals during intra-day trading, because traders do not have to keep analyzing a large number of insignificant price actions, which confuses them as they over analyze the market.
As already discussed, you should observe the market for clear signals before executing a trading plan, and it doesn’t take more than 15 minutes, because you just have to analyze the charts with daily time frames. If you are unable to find anything in the first 10 minutes, then you would probably not find anything worthwhile to trade.
Plotting the Support and Resistance Level
A trader should make it a habit to mark the resistance and support levels on the charts at the beginning of a trading week, and when they find signals, they should see if these signals match any of those levels. One of the good thing about this is that these support and resistance levels can be modified accordingly when the New York markets close.
Monitoring the Market Varying Conditions
After plotting the support and resistance level, a trader must assess whether it is a trending market or consolidating market, and what the obvious trading range will be. If you do not have a favorable market condition to execute your trading plan despite having strong signals, you should avoid trading on the basis of signals. However, with end of day trading strategy, you can manage to stay away from market disruptions, and avoid over trading.
Join in and write your own page! It's easy to do. How? Simply click here to return to Currency Options Trading Articles.