Binary Options Trading vs. Forex Trading – Here are the facts
The popularity of binary options is increasing rapidly these days, traders worldwide are more eager to invest on a yes/no market proposition. Binary Options are easy to use and offer high profits, therefore traders find them very appealing.
Investors typically face a choice before they start their financial journey, should they open a forex trading account or a binary option one¬¬. There are a few similarities between the two, however, the differences are much more significant and distinct.
Payouts and Risk
Binary options: With binary options the risk and profit potential is known in advance, you know before hand how much you stand to gain or lose. Most brokers offer an average of up to 80%, MaxOptions for instance offers traders as much as 81% return on an investment.
Forex: Before you start trading forex , you should know that the risk is very high. You might lose all of your money on one trade. A stop loss can be used to control the risk, however, market fluctuations may prevent the order from being executed and cause an unexpected lose.
Binary options: In binary options the price magnitude does not matter, even if the price of the chosen asset Can be stocks, commodities, indexes or Forex currency pairs. More hardly moves, you still stand on gaining the fixed payout if you and up in-the-money.
Forex: With forex, price movement matters. Traders have to pick not only market direction, but also how far it may go – for and against them.
Binary Options: Each broker has a maximum and minimum trading size, with MaxOptions you can start your trade with a minimum of $5 which allows you to minimize the risk. The maximum trades can run up to $5000 per trade, investors set the trade size beforehand. Trades close automatically based on the expiry rate which was scheduled by the trader.
Forex: Brokers may allow micro trades which are set to 1000 units of the base currency. The maximum amount may reach to $10,000,000, which is not set in advance; therefore if you do not pay close attention to a trade you may lose your entire account rapidly if the trade ends out-of-the-money.
There are many differences between both trading opportunities, you can conclude from the main points indicated above why investors now days prefer to trade binary options. MaxOptions welcomes each trader and offers investors a user friendly platform where they can feel confident to invest and generate profits. You can join traders worldwide at any time and collect payoffs 24 hours a day as long as there is a market open.