When you place a binary options trade, your expiration time is the time period in which you are wagering price will or won’t reach a certain level or levels for the financial instrument you’ve chosen.

As a general example, perhaps you’ve placed a Double No Touch trade on GBP/JPY with an expiration period of one day.

This indicates that you’ve wagered that this currency pair will not touch either of two price values you’ve selected for the duration of that day. If either price value is touched during that day, you’ll lose your investment. If however the price stays within your constraints for a full day, you’ll be profitable.

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How do you choose an expiration time?

There are two ways you could do it. You could either do it individually for every trade, choosing the expiration period which makes the most sense based on what you’ve determined is likely to unfold, or you can decide to trade only within a certain expiration time period on every trade, and only take trades that you expect to be profitable within that time period.

A good general rule of thumb is that the longer the trade is, the easier it is to make a profit. The 60 second options are exciting but hard to win over the long term.

You might only take hourly trades, or only take weekly trades, or so on. This is one way in which trading binary options is very different from placing other types of trades. With traditional trades in Forex or commodities or other assets, many traders will only trade a certain timeframe or timeframes.

With binary trading, however, you’re not trading timeframes in the same sense.

Someone who looks at the hourly Forex charts is often in a trade on their timeframe for a day or longer. If you place an hourly binary options trade, you’re going to be in it for an hour, at the end of which you’ll be profitable or otherwise, and that’s that. If you believed you found a trade that would be profitable within a longer or shorter time period, you wouldn’t want to choose an hourly expiration period.

As a beginner, there are timeframes you might want to avoid. Many beginners are drawn to the 60-second timeframe, but this is not a good idea. You may think, “The less time I have to be in this trade, the more likely it is I’ll go on to win.” While this may seem sensible, consider that in order to pull any real profits you’ll need to place very tight entries since you’re not going to get good odds on a trigger that’s far away from price.

Another odd point is that the Australia binary options traders seem to love trading the 60 second options. I don’t know if it is the gamble from down under or what, but the 60 second traders are hot for the Aussies.

That means very small price movements can cost you your money, and you can blow your account very fast. As a beginner, you need more time to think through your trading decisions. At least if you trade longer expiration periods in the beginning, you’ll have hours or days or weeks to figure out what you’re doing wrong and stop doing it. With the 60-second trades, it’s far too tempting to make several bad trades in a row to try and win your money back, which means all it takes is several minutes of foolhardiness to blow your account. Start slow and work your way up if you still want to later!