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Difference Between Forex and Binary Options Trading

While Forex trading has always been a conventional way of earning money using the currency market fluctuations, a new method of trading has evolved in the last few years, its called Binary options. Binary options, that’s more like betting, trades direction and not the price as does Forex trading. To make it easier to understand , Binary options offers a bet where your Job is to anticipate whether the price of the selected pair will be above or below the entry price , after a certain period of time, which could be End of hour (EOH) or End of day (EOD) or even end of week (EOW). If your bet is right and the market actually ends the way as you had assumed in the beginning, then you get a certain payout, usually about 80% of the bet amount. Otherwise, you lose all.

This definitely would have been simpler and safer method to trade the market as Binary options do not have any take-profit targets or stop-losses. An experienced Forex trader knows how the stop-loss fails to trigger in times of sudden spikes which can blow up even the entire account. This threat is eliminated in Binaries as there is no stop-loss and no threat to Balance. You can lose only what you have staked, irrespective of how high or how low the market goes in the duration. Similarly, There is no need to even watch the market Non-stop as there’s nothing you can do in-between the trade, you can’t close it in the middle and it doesn’t matter really what’s happening there in the middle. You simple place your order and then come back only after the selected slot of time i.e. come back only after an hour to see if your bet has failed or it has paid.

Compared to Forex trading, Binaries are definitely more systematic and more organized in terms of maintaining your trading discipline, provided you get your directions right, 65% times at least. Its only then that you make profits. However, the money is safe and that’s important.

This is how things are seen from a broad perspective. But a really good trader will still prefer regular Forex trading over binaries, reason is that Forex trading allows you to even double up your money with a single trade, a feature that is not available with Binaries as the maximum you get on a win is 80%, 70% sometimes, sometimes even 60. So to maintain your profitability, you need not only 65% win rate but also bets worth the same payouts and not less. This could be a bit tricky, analyzing your instruments and then coming back to your broker to find a different payout. This is not the case with regular Forex trading as once you have chosen your leverage, once you have found you definite trades, you can always double your money in a single trade and it doesn’t matter you lose it sometimes, the system will restore all your money in no time. So Forex trading definitely is a better style assuming that you have picked two things from Binary options that you take only one trade at a time or in a fixed period of time and second that you don’t check the market until its time to take the next trade. Just bring these two habits in your Forex trading and there you have it, a Glorious career ahead of times!

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