- Fixed Time Trading Explained
- Best Brokers Offering Fixed Time Trades
- Example Fixed Trade
- Pros of Fixed Time Trading
- Cons of Fixed Time Trading
- Trading Strategies
- Trend Following
- Range Trading
- Comparing Fixed Time Trading Brokers
- Investing Tips
- Bottom Line on Fixed Time Trading
- What Is The Best Fixed Time Trading App?
- What Is The Best Fixed Time Trading Strategy?
- Is Fixed Time Trading Halal Or Haram In Islam?
- Is Fixed Time Trading Profitable?
- Is Fixed Time Trading Gambling?
Fixed time trading involves predicting the future price movement of an asset in return for a fixed-odds payout. This type of online trading is popular with beginners owing to its convenience and simplicity. This guide explains how fixed time trading works with examples. We also look at the pros and cons, short-term strategies, plus the best supporting brokers in 2022.
Fixed Time Trading Explained
Fixed time trading is a straightforward type of online investment that falls under the broader umbrella of binary options. Traders essentially speculate how much the price of a security will change over a set period. If successful, the trader receives their initial investment plus a fixed payout. If unsuccessful, the investor loses their stake.
The best brokers offer fixed time trading on a range of traditional markets, such as forex, stocks, indices, precious metals and energies, plus emerging assets like cryptocurrencies. Importantly, fixed time options are derivatives, meaning investors do not take ownership of the underlying asset.
Contracts typically span from one-minute up to an hour, though longer-term options are also available on some platforms (we explain how to compare brokers further below).
Best Brokers Offering Fixed Time Trades
Example Fixed Trade
Importantly, potential profits and losses are known upfront with fixed time trading…
Let’s assume you stake $100 on the price of gold increasing in the next 10 minutes. The yield on this contract is 80%. If your prediction is correct, you receive $180 ($100 + (0.8 x $100)). If your prediction is incorrect, the broker will take your $100 initial stake.
Note, higher payouts mean traders can generate larger returns across fewer winning trades. For example, with payouts of 90%, traders need to be successful 52.7% of the time to turn a profit. However, with payouts of 75%, investors need to be correct at least 57.2% of the time.
Pros of Fixed Time Trading
Advantages of fixed time trading include:
- Simplicity: Fixed time investing products offer a straightforward way to profit from short-term price movements in popular financial markets
- Convenience: Investors do not take ownership of the underlying asset while potential profit and loss are known upfront
- Flexibility: Fixed time trading is available on a wide range of markets from currencies and equities to soft commodities and digital assets
- Capped losses: You cannot lose more than your initial stake, unlike trading on margin
Cons of Fixed Time Trading
Of course, there are also downsides to fixed time trading strategies:
- Risk: Traders must win over half of their trades to be profitable in the long run. Retail trading is also inherently risky with no guarantee of profits
- Limited profits: The profit level is set by the broker and is usually limited to less than your initial stake
We have collated several beginner-friendly fixed time trading strategies to help investors get started:
This straightforward technique is about exploiting short-term price trends. When a trend gains momentum, it attracts the attention of more traders. This pushes the price even further until it changes direction.
Candlestick charts are commonly used for identifying short-term trends. Available on most fixed time trading platforms, candlestick charts display opening and closing prices (the thick part of the candlestick) plus the highest and lowest prices (the thin wick or shadow). A strong trend occurs when each peak is higher than the previous peak, and each trough is higher than the previous trough.
To determine the strength of a trend, many traders also turn to momentum indicators. Among the best indicators for fixed time trading are the Average Directional Index (ADX) and Relative Strength Index (RSI).
The RSI is an oscillator that takes a value between 0 and 100. When the RSI is above 70, the market is overbought, so a downward trend may begin. Conversely, when the RSI is below 30, the market is oversold, which could push prices up. The ADX indicator can also be used to validate assumptions. A strong trend may be about to occur if the ADX is above 25.
Once the trend has been identified, all that remains is to open an up or down position. Trends with greater momentum tend to last longer, so it may be worth opening a longer fixed time trade. Alternatively, some traders prefer to open multiple short-term trades.
Range trading strategies involve identifying key support and resistance levels. When the price struggles to break above a particular value, it becomes known as a resistance level. Similarly, support levels can be thought of as the minimum price an asset can hold before it is pushed upwards again.
Levels of support and resistance are driven primarily by trading psychology, often occurring at round numbers (for example, a particular stock might meet a resistance level at $200). The more times the price reverses direction at a support or resistance level, the stronger it becomes. Many fixed time traders wait until the price has touched a level twice before identifying it as such.
Various technical tools can be used to identify support and resistance levels. One of the most helpful is the Fibonacci indicator. This plots lines at 23.6%, 38.2%, 50%, and 61.8% of the price range. These levels, linked to the Fibonacci ratio, often correspond to points of support and resistance.
Traders can align their entry with the point at which the price meets a support or resistance level, allowing them to profit from potential reversals. With that said, range traders need to be aware of possible breakouts.
Breakouts occur when a sideways-moving market begins to trend strongly. If traders correctly predict the direction of the breakout, they can use fixed time trading contracts to generate quick profits. Volatility indicators like Bollinger Bands, plus the ATR and VIX indicators, can be used to stay ahead of breakouts.
Many traders also use Moving Average Crossovers to identify possible breakouts. Moving averages calculate the average price of an asset over a particular period, for example, 10 or 30 minutes. Note, there are several types of moving averages, including Simple Moving Averages and Exponential Moving Averages. These weight transactions differently depending on how recently they occurred.
Importantly, when a shorter moving average moves above a longer average, this indicates that more traders are buying the asset, potentially heralding an upwards trend. Similarly, a downwards price movement can be seen when a longer average moves below a shorter one, or the price itself. Fixed time traders may use multiple moving averages to increase the accuracy of their predictions.
Comparing Fixed Time Trading Brokers
With a long list of brokers and platforms available, comparing providers can prove challenging. Consider the following factors:
- Technical tools: Top-tier platforms provide detailed and accurate market data with interactive and user-friendly charting and analysis tools.
- Payouts & fees: Potential profits and payouts vary between brokerages, so shop around for the most competitive deals. Also take into account that some platforms offer higher payouts in return for larger initial deposits. Finally, look for deposit and withdrawal fees, plus inactivity penalties, as these can cut into profit margins.
- Demo account: Paper trading accounts can be used to explore new strategies and to sample online platforms. The best brokers offer an unlimited demo account with uncapped virtual funds.
- Trading apps: Fixed time trading applications allow you to trade from any location. The best mobile trading apps offer comprehensive account management, straightforward navigation, plus mobile-friendly analysis tools.
- Automated trading: Bots can automatically open and close fixed time trading positions based on a pre-programmed set of instructions. These can be an effective way to put successful strategies on autopilot. Note, not all brokers support the use of fixed time trading bots.
- Security: Unfortunately, there are some scams in the binary options trading space. With that in mind, choose a broker with good customer reviews and ratings. Also look for regulatory oversight from a trusted financial watchdog, such as the CySEC or ASIC.
Here are some of our top fixed time trading tips and tricks:
- Learn all you can about fixed time trading through books, online courses, and tutorials. Demo accounts can also be a great way to get to grips with market dynamics.
- Use the news. Big announcements often lead to short-term price increases (or in some cases, decreases). The top brokers offer integrated news feeds within their trading platforms.
- Follow a strategy. This helps you to avoid making rash, emotional decisions. You can also tweak and optimize your strategy as you gain experience. Investing without a plan is essentially gambling.
- Manage your money sensibly. One of the most popular money-management strategies is the percentage method, where traders invest a set percentage of their funds on each trade, for example 1%. This can help you avoid running out of funds if a few trades don’t go your way.
- Some investors use fixed time trading signals, which offer trade suggestions based on expert analysis. However, the accuracy of signals varies and some providers charge high fees.
Bottom Line on Fixed Time Trading
Fixed time trading is a simple and convenient way to speculate on traditional and emerging markets. This form of trading is particularly popular with beginners looking for fixed payouts and capped losses. Fortunately, there is long list of brokers that offer fixed time trading today. Use our guide above to compare the best platforms.
What Is The Best Fixed Time Trading App?
Some of the best fixed time trading applications include Pocket Option, IQ Option and Olymp Trade. Each provider offers a mobile-friendly solution that is compatible with iOS and Android devices. Applications can be downloaded from the respective app store once a live account has been opened.
What Is The Best Fixed Time Trading Strategy?
Sadly, there is no one-size-fits-all trading strategy that can guarantee profits. Instead, successful traders will need to trial various technical and fundamental approaches to find a technique that meets their needs. See our guide above for strategy tips.
Is Fixed Time Trading Halal Or Haram In Islam?
Whether fixed time trading is permissible under Islamic law has been hotly debated. Some argue that it falls under the umbrella of gambling, while many feel it is acceptable if traders use a careful strategy. Consult a trusted religious authority for further guidance.
Is Fixed Time Trading Profitable?
Fixed time trading can lead to healthy profits. However, many investors lose money and there are no guarantees when speculating on the financial markets. With that in mind, make sure you have a strategy and money management plan.
Is Fixed Time Trading Gambling?
Fixed time trading is a form of fixed-odds investing with predetermined profits and losses. Traders should avoid a gambling mentality and instead use a carefully developed strategy.