What a lot of beginners to binary options trading may find unusual is the length of the trades. This is because the duration of trades with this type of trading is actually quite unique. Here, the trader does not get to choose how long a trade lasts. Instead, this is up to the broker. What the broker will do, however, is provide the trader with a series of choices.
These choices are different intervals, and they can be anywhere from a minute long to five minutes long. Of course, the options that are offered depend on the broker, and as such, traders may find that they have a lot more variety to choose from.
One thing that you need to understand about the trades and their expiry times is the value that is involved. The trade only has value once it has expired. This means that in most instances, traders cannot exit a trade until it has expired. There are, nonetheless, brokers that offer traders the option to back out if they feel as though they made an incorrect assumption. The trader does stand to lose a majority of their money, while retaining some of the initial investment. Here are a few other things you may be wondering about the length of a trade:
Why are Short Trades Not Always Profitable?
At any given moment, traders are looking to make as much money as they can within a short period of time. This is why a lot of them tend to prefer the shorter trades. In fact, given the opportunity, many traders actually opt for thirty second trades. This is because they are focused on the fact that they can make up to 80 percent of their initial investment in less than a minute. However, if you are not suited to make these trades, you will stand to lose a lot more than you gain. This is why, if you want to get involved in short trades, you need an appropriate strategy to support you. Even then, you will need to be quite careful about the trades that you place.
How Long Do Most Trades Last?
As mentioned, there is a great deal of discrepancy between the lengths of trades. Nonetheless, most traders tend to prefer trades of a particular duration. Thus, a majority of the trades are between one minute and five minutes long. The brokers present the time period available for each of the trades and it is up to you to make sure you choose the one that is best for your strategy. Of course, there are trades that last longer than the usual ones. It is not uncommon to find trades that can last anywhere from thirty minutes to even an hour long.
What are Some of the Longest Trades Available?
If you are looking for an even longer trade, you will be able to find one. The lengthiest trades can last for a month or even longer. This usually happens if you are placing trades on the Forex market. This is because Forex traders are usually unable to adequately determine the performance of currency within a short period of time.
They usually need a longer time to decide which direction that the price will go in. In addition to currency, you may also be able to find longer trades in a variety of commodities such as oil, gold, and silver. There is also a possibility of placing longer trades with stock as well. What you need to understand about longer trades, however, is that most of the time, you will be unable to exit them. Thus, unlike other binary options trades, you will not have access to that money until the trade expires.
Now you know just how long a binary options trade can last. When deciding the expiry time of a trade, you should always consider the strategy that you are using. This is the best way to ensure that you will be more likely to make the correct assumption regarding the trade.