Binary Options or Forex ?

binary chart

Should i trade Binary Options or Forex ? - is a legitimate question. What are the advantages and disadvantages of Forex and Binary Options trading? These interesting questions we will answer in the following article. Our experts compare the facts.

BINARY OPTIONS FACTS

Binary options are the simplest ways to trade price variation in multiple global markets. They are structured to be either fixed compensation amount if the options expire in the money, or nothing if the options expire out of the money. Trading the binary options is very exciting, but is important to understand the advantages and disadvantages before you indulge in it.

Advantages Of Binary Options

High Returns On Investment

In addition to their simplicity to carry out transactions, binary options are highly profitable. In most cases, traders see return rates of more than 70% of the invested amount: something you can not see in the stock market. However, the return on investment varies depending on the market hours and liquidity.

Quick Profit

Beside high return on investment, binary options also make it possible to earn money quickly. It is possible to see returns in as fast as 60 seconds. In fact, most binary options traded have one day or shorter expiry time.

Low Initial Investment

No matter the investment capacity of the trader, binary options open their doors by democratising investment, making them accessible to everyone. The brokers have a relatively low minimum deposit.

Disadvantages Of Binary Options Trading

Less Advanced Trading Tools

The main objective of binary option platforms is simplicity. The charts posted online by most binary options are very simple and less developed. However, while you are in a trading process, you will see the graph and identify whether you are in-the-money or not.

Short-term Outlook

Because the expiration time for most binary options is one day or less, their market outlook is extremely short-term. Combined with several random movements in the market in the short term period, it is not easy to predict the right direction the market will move.

Loses More Than 95% Of The Investment In A Short Time

When trading binary options you need to understand that they make a lot of money in a short time and lose a lot of money in a short time as well. The reward is usually lesser than the risk, as losing trade cost you much more than winning ones.

FOREX FACTS

Forex is foreign market where currencies are traded, and the world’s largest financial market dealing with real-time exchange of currencies of different countries. Forex trading involves purchasing one currency by paying another currency. Here are a few advantages and disadvantages of Forex trading.

Advantages of Forex Trading

Superior Liquidity

With global trading and enormous size of the Forex market, the major currency pair in the market is very liquid and trade execution is almost instant with little slippage.

High Leverage

Starting from a minimum of 100:1, Forex market of traders huge leverage amount, meaning they can earn good profits by investing small amounts of deposit.

Round-the -clock Trading

The forex markets are open 24 hours a day, five days a week, meaning traders can trade at any time of the day or night comfortably, from Sunday 5.00pm (ET) to Friday 4: 4.30 pm.

Profitability

Because Forex trading often involves buying one currency and selling another, there is no structural bias to the market. All traders have equal potential to profit in a falling or rising market.

Online Services and Tools

Forex trading allows traders to trade at the comfort of their homes. Online services and tools allow both experienced and novice traders to understand, monitor and analyse the market.

Disadvantages of Forex Trading

The Forex Market Is Fast And Volatile

One of the main disadvantages of the Forex market is that it is fast and volatile. The fact that traders can make money fast, the downside is that they can lose money fas as well. The currency value can change without warning, making it difficult to accurately predict when to invest the money.

High Leverage

Besides serving as an advantage to attract traders to the market, high leverage also serve as a disadvantage to them. High leverage can help traders make a bigger investment with smaller capital, and at the same time lead to losses that are greater than their initial investment.

When To Invest In Binary Options Or Forex

One of the best principles of organised trading is to time your investment appropriately. Try to understand the timing patterns to invest vigilantly. The best thing to do for both the options and Forex trading is to study a number of instances that give positive results and some which created losses to help you make a valid decision.