What Is an Option

Ted Capwell

First and foremost, in order to be able to properly explain flat and its place in regards to binary options exchange, it is important to have a basic understanding of options themselves.

What Is an Option

It is a particular, completely unique financial tool that enables financial traders to profit from their financial forecasts. The forecasts are made up of the previous course tendencies of currencies, the cost of raw materials, shares in large corporations, and, effectively, any attractive asset. The process itself is referred to as trading, and the people who conduct the process are called traders or private investors. Traders can buy or sell their chosen asset for set time intervals. If the forecast comes to fruition, profit accrues that can equal up to 90% of the initial investment.

This financial tool doesn’t require a thorough market analysis of assets as is necessary on Forex, for example. To that end, you don’t need to worry about what points the rates pass on the chart, one will be enough. But that far from implies that it all comes down to dumb luck.

So, to begin trading, you need to:

1. Select the period of expiration (meaning the duration of the trade);
2. Identify its value;
3. Come to a conclusion regarding future price movements on the chart, down or up.

And once you’ve come to a decision, select whichever trading strategy best fits the specific market situation.

Do You Have to Trade On An Active Market?

Is an active market a necessary prerequisite for trading profitably? Or are there some other ways to trade on quiet, “flat” rates?

Of course, to always turn a profit, traders must have a strong grasp of the various trading conditions, and place trades at a tempo that suits the situation, pairing each with an applicable strategy.

So, as we have previously outlined, on the binary options market, it doesn’t matter how far the asset price moves in the correct direction. Even if the asset price only moves one point in the forecasted direction, the trader makes a profit, the amount of which is predetermined.

However, it’s not that simple. In order to achieve the best possible financial results, it is not only vital to utilize a suitable strategy but also to select the optimum time for its use. When you enter a trade has as much of an impact as your chosen trading system, and the price that you set when opening the trading operation. Moreover, without trading at applicable times of day, the vast majority of strategies are completely pointless, nothing will come of them.

To put it simply, the price on absolutely every asset chart fluctuates differently depending on the time of day and day of the week. And this must be considered in the work, as this is the only way to properly comprehend what tempo and roughly how the price range fluctuates within a minute or several hours, as well as when the range shifts.

This is why every trader should work out the best and most suitable trading time for them. Some will prefer an extremely active market, and others to trade during quiet periods, or, as they are called, “flat” horizontal rates. This tactic is often chosen by beginners who still have a fear of fast-paced trading that requires extreme concentration and instant reactions to market shifts on the asset chart.

The Best Periods For “Flat” Trading

Asset prices spend a great deal of time moving horizontally, or flat when the rate movement remains in a defined corridor without any clear upward or downward trend. The rates fluctuate from levels of support to those of resistance, then back again, leaving their overall movement to appear nearly horizontal. The following example, a screenshot from the platform, depicts typical flat rate movement:


What Is an Option


This bright, “Beautiful” as one might say, flat period can last long enough at certain times that experienced traders take advantage of the situation to place lucrative trades.
The continuous price movement of the EUR/USD is shown in the screenshot, remaining within a price corridor. It moves near horizontally, the rates do not make any sharp movements. The points of entry are marked by circles and the direction of the trade with arrows.

Traders should always have a trading session schedule at hand in order to assess the ideal time to trade. This helps work out the most optimum time flat trading. The international currency trading schedule plays a leading role in the formation of intensive price fluctuations on the charts of various trading tools. And there is even more pronounced influence on stock charts of currencies of countries currently actively in session.

When you have selected an asset as well as when you plan to trade it, it follows that you should also take into account time differences and seasonal schedules. When the exchange opens, as a rule, intensive price movements are visible on the charts of assets tied to that exchange. Making flat trading in those periods impossible, as there is a significant market entrance of traders buying or selling securities, currencies, and so on. Therefore, their price rate fluctuates due to the increase or decrease of stockholders. These volatile market periods also occur at the closing, as large numbers of trades are placed, changing the value of the asset, and therefore its price as well.

When is it best to trade? So, in terms of days of the week, Monday can be considered the day of flat price movement. The flat appears due to the lack of trading over the weekend, so when the market reopens there is extreme market movement.

See for yourself, and be certain that, if you conduct chart analysis on Monday, you don’t see intensive uni-directional movement that very rarely appears. The issue is that there isn’t enough macroeconomic news released the first working day following the weekend, so those days specifically experience the most extreme market movements. Therefore, Monday, as is the night any day, is in principle suitable for applying flat trading strategies.

However, on holidays (especially over Christmas and New Years – 20.12 – 05.01) the market behaves less predictably during typical flat periods. Even if at first glance it appears stable and general flat, periodically there are seemingly unexplained sharp price drops on the chart.
As financial injections in trading over the holiday period causes spikes (that never level out), trading on those days can be completely unpredictable, leading to a higher possibility of a trader losing significant proportion of their financial means. For that reason alone, it is worth taking a break from trading and relaxing alongside everyone else.

Considering all the factors listed, in conclusion, it is possible to trade lucratively on the binary options market even when price movement is flat, and this is, in general, true for all assets.
However, a large number of currency traders think that it is too risky to trade over flat periods, as when the exchange re-opens it is not clear enough in what direction the price will move. That is undeniably true, however, only in regards to Forex and the stock exchange. As the number of points, the price passes isn’t important when trading with binary options, the final profit isn’t affected in any way.

How to Trade

In essence, flat can be considered a trading strategy in its own right. As the “price corridor” system, based on the properties of flat rates, is lucrative enough. If described “in two words”, it would look like this: The rates reach the upper border of the corridor, reverse, then, following that, traders should “SELL”. Controversy, when the rates fall to the lower border of the corridor, expect a reversal and “BUY”.

A Flat Indicator Trading Strategy

In order to increase the overall effectiveness of the system in terms of profit, trading indicators are additional signal tools that you can take advantage of. All the screenshots below are taken on the platform, as all the necessary means of automatic analysis are present.
The first indicator that we apply to the rates are Bollinger Bands (with all of the parameters that come with them):


Do You Have to Trade On An Active Market?


The second signal tool that is necessary is the Moving Average:


The Best Periods For "Flat" Trading


Select the Weighted Moving Average, and set the period as 1 as well:


How to Trade with options


The recommended period of expiration for the trades ranges from 1 to 3 minutes. To follow the money management guidelines in this situation, we abide by the classic principle that any one trade should not account for more than 3% of the total funds.
It is also worth keeping in mind that work must be suspended for about 5 minutes prior to the release of important macroeconomic data.


● If the Moving Average is moving towards to the lower wall of the corridor, breaks through, then returns back;
● During the return, a growing green candle will appear:


A Flat Indicator Trading Strategy



● If the Moving Average is moving towards to the upper wall of the corridor, breaks through, then returns back;
● During the return, a falling red candle will appear:


The Optimum Time


It is very simple, yet very profitable.

The Optimum Time

You must conduct an independent analysis in order to isolate the ideal “flat” period for trading a specific asset. Of course, to do this you must gather quite a bit of information on that particular time period, however, you can gather this information through the trading process with the help of trading diary and cursing through the history. Simple follow the strategy for 2-3 months, then conduct an analysis of the results focusing on the days of the week, the time of day, and other parameters. For several of the assets, there are certain days of the week that you should avoid trading them on. Regarding the daily analysis, note when the sessions open and close to work out the optimum time to trade. Combine the results of your analysis with the trading strategy, therefore increasing your overall trading results automatically. Using these recommendations, you can not only isolate the most suitable periods for trading but also begin earning the maximum amount of profit possible.


“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”