As far as I know it, Forex deals only with currency trading, while Binary Options deals with all kinds of commodities (like gold, currency, metals, etc.). Forex is heavily regulated, while Binary runs wild (a lot of companies that runs Binary retail program is registered in Cyprus, which kinda fishy and not-so-reputable if you ask me). Both US and EU (through European Securities and Markets Authority) have banned Binary in their respective territory. Also, Binary is way more risky than Forex. Feel free to correct me if I'm wrong. Maybe
@fenix666 and
@Harvey could helps us by explain it with more details since they both have more experience in this field.
Thanks for the mention!
Binary options is a trading instrument of the derivatives market, in order to make a profit which, just like in Forex, you need to correctly predict the future direction of instrument. But for Binary options it doesn't matter
what distance in points the price of instrument will go. Trader receives a predetermined profit if the instrument move towards the forecast,
at least by 1 point! Therefore, the only important question for Binary traders is which direction the insturemnt will move -
UP or DOWN and
how many points they will go in this direction they are not interested!
Binary trader can get a profit of 90% from the size of the transaction (
but loss is 100% from the transaction!) while Forex trader can't achieve such result so fast - for this profit (90%) the instrument must go a tremendous distance in pips, while on Binary trading 90% of the profit is just 1 point in the direction of the correct forecast of Binary trader!
How much can you earn on Binary options?
The average result of an experienced Binary trader is about
50-100% per week.
How much profit can you get on Forex?
About
100-150% per year!
The difference is obvious - 50-100% per week or 100-150% per year? And this is with the
classic risks. Of course you can get with agrressive trading and high risk and get 50-100% per day in Binary and 100-150% per month (or per week) in Forex.
Pros of Binary:
1. Profit depends on 1 point of instrument movement in the direction of the trader's forecast.
2. Income from one transaction is up to 90% of the investment amount.
3. Binary options are very easy to use and even a beginner can trade on them.
4. Trading does not require large investments - you can start trading with $ 10 and, due to the high profitability of option contracts, quickly disperse your trading account.
5. Binary options trading is carried out on simpler trading platforms than on the Forex market, on which all possible actions of the trader are intuitive.
6. Training in option trading, due to its simplicity, takes significantly less time than learning to trade in Forex.
Cons of Binary:
1. If the profit in the transaction is up to 90%, the loss is 100%. Therefore, in Binary options for stable and profitable trading, the number of profitable transactions should be at least 60% of the total number of trades.
2. There is no possibility of automatic trading on Binary options platforms (using different Expert Advisors/Robots), so you will have to trade on your own. However, for many, manual trading is not a problem.
I hear a story from one of my friends - there was Forex trader with stable profit of every month and he accumulate a good capital. He decided to trade in Binary options. Learn some basics for a few days and invested all his capital. And via 1 or 2 weeks he lost everything! Then he get a loan to return all his loss - started to trade Binary again and via 2 weeks... lost everything again!
So for someone Forex is better, for someone Binary is better to get profit. You just need to try Forex and Binary and decide what is better for you. Ty to hear your inner voice or just your feelings.