Binary Options Trading vs Forex Trading

Forex market is currently one of the largest markets worldwide as daily turnover volume. A big part of this huge daily volume is represented by online trading. The total online forex market constantly increased in the last couple of years and the trend is expected to follow the same direction in the next period of time.

The binary option trading is a relatively new form of forex trading but is very simple and already attracted a lot of traders. Now the number of binary options brokers is small compared to the number of online forex brokers, but specialists say that the market is growing fast so the number of both, brokers and players will increase rapidly.

Comparing the forex trading with binary options trading is easy to see that each type of forex trading has its own advantages and disadvantages. First of all, forex trading requires special trading skills while trading binary options is so simple that anyone can do it without any previous financial traning.

Binary options have a higher profitability rate that usually ranges between 60% and 85%. In forex trading the return is uncertain and only after the position is closed you can find out the profitability. Binary options are also much safer than forex trading because most brokers offer a refund that can go up to 15% of the amount invested in options. In forex there is no safety net so if your predictions are wrong you will lose all your money invested in transaction.

In forex you can trade nonstop during weekdays but unfortunately in binary options you can trade only in certain intervals from Monday to Friday. The binary options trading hours depend on the local financial markets and commodity exchange hours.

Although they are quite different, both types of financial trading share common advantage: the accessibility. Whether you want to trade on forex or you want to trade binary options, you only need a computer with internet connection and a bankroll that can be as low as $100. This means that practically everyone can become active trader on forex or on binary options.

Author: Mihaela Florea