Binary Options vs Forex Trading
Forex Binary Options has become very popular during the last years!
This sentence is written in a lot of articles. It’s clear that when you offer a new and unique system for earning or losing money, Many people will be eager to test it. Some of them will leave it and some of them will continue because Forex Binary Options is a new term and sometimes looks like gambling. It is obvious that a new system will attract a lot of people. But we should consider the fact that whether they will stay in Forex Binary Options or they will leave it and come back to traditional Forex trading?
To answer this question, we should know that which one is riskier and which one is better for investing not for fun! It is clear that Forex Binary Options is riskier than normal Forex trading. Thus, the serious investors will continue normal Forex trading but sometimes they may trade on Binary Options too because it is new and more exciting. But how about beginners?
It is hard to answer this question: what will happen if a new person faces with Forex Binary Options and normal Forex trading without any knowledge? Which one will attract him?
We believe it completely depends on the brokers’ advertisements. In our opinion, that Forex Binary Options is more attractive for beginners because it is simple and more exciting. Anyway, maybe spot Forex trading attract them in the future.
- When you are trading on a Binary Options, you are forced to wait till expiry time. Sometimes you are in profit but at the last second, you will lose! Yet in Spot Forex trading, you can close your position whenever you want.
- On normal Forex trading, you can trail your order in profit. You are also able to modify your stop-loss or make a profit but in Forex Binary Options you have not these options.
- Your profit in spot Forex trading depends on market movement. However, in Binary Options, it’s fixed then you are not worried about huge losses during Forex news or market gaps.
- In Forex Trading you can send different order types like buy stop, sell limit, buy limit, and sell stop. Therefore, you can set the expiry time for your orders with stop-loss and make profits. However, these options are not available on Binary Options.
In some sources we have: “You can never get a margin call on Forex Binary Options!” and ” There are no spreads, rollover/swap or commissions while trading Binary Options.”
Which One Is More Profitable, Binary Options vs Forex Trading?
First, we should say when you are trading in spot Forex Trading, you are using stop-loss but when you don’t use stop-loss, you will see a margin call. A margin call means you lose all your money because of your fault. If you look more wisely, you can realize that both Forex Trading and Binary Options can wash out your money if you trade badly!
Second, it is very interesting if you think that on a Binary Options you will not spend spread! Then how the broker will earn money? For example, when you call a 1-minute order, you can win an 80% profit. However, when you lose you will lose 100%, which means that your spread is 20%! And you can’t win in Binary Options according to your chance trading.
It is hard to answer this question. Some sources claim that Forex Binary Options Trading is more profitable. If you are a good scalper, Forex Binary Options is the best choice for you but Spot Forex Trading is more profitable for long-term traders.
We believe that Forex Binary Options will develop more and more and it will be a good rival for Spot Forex Trading. Today we can find auto trading strategy robots for Binary Options, too. Then, we should wait to see a new and surprising idea on Forex Binary Options.
Risk or Reward Ratio: Binary Options vs Forex trading
In Binary Options your risk/reward ratio includes fix percentage but in spot Forex trading, you are able to change it yourself well. It seems that spot Forex trading surpasses Binary Options trading for risk/reward ratio well. Here spot Forex trading is a winner.
Loss risk on each trade
In spot Forex trading you are dubious about your real loss amount. Maybe, you put stop-loss because of market slippage but in Binary Options your maximum loss and risk have a fixed amount as well. Here Binary Options trading is a winner.
Profit percent on each trade
When you open a Binary Options trade, you will receive a specified profit percent. If the market goes only 1 pip through your position, your profit on spot trading depends on market movement. Sometimes you will win a lot and sometimes you will win a few amounts of money. The reason is that we can’t usually see huge market movements. Sometimes the market movement is against our position. Thus, Binary Options trading is a winner on our competition of Binary Options vs Forex trading.
You are able to send stop orders, limit orders, and set a lot of indicators on spot Forex trading. So Meta trader allows you to use expert advisers for automatic trading. You can modify your orders on spot trading and close your position partially. But in Binary Options we have not these options. Maybe in the future, some brokers add these features. However, at the moment spot Forex trading is more flexible in comparison with Binary Options trading.
Margin and profitability
Spot Forex trading and also Forex brokers give you high leverage like 1:1000 to increase your profitability. On Binary Options we have not to leverage because we are not trading. In fact, in Binary Options we bet on the market’s direction that here both are equal.
Trading on Binary Options is like a game. Although, trading on the spot market is different and more difficult to some extent, for beginners or inexperienced traders. Binary Options are easier to understand and trade.
Leave a Reply
- Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, and b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.
- Binary options are prohibited in EEA
- Please be advised that certain products and/or multiplier levels may not be available for traders from EEA countries due to legal restrictions
Articles and Trading Tips
- Binary Options Free Contests and Tournaments Brokers List
- What is a risk free trade?
- Forex No Deposit Bonuses
- Binary Options No Deposit Bonus Brokers List
- Binary Options Low Minimum Deposit Brokers List
- Forex Low Minimum Deposit Brokers List
- Binary Options Trading USA Customers Welcome Brokers List
- Binary Options Free Demo Account Without Deposit Brokers List