Online trading is increasingly rising in popularity, and has been mostly centred in the Forex and binary market options. Many new traders find themselves showing an interest in trading in either one of these two main markets, but are unsure as to which will be the best choice for them or which one is more likely going to give them higher returns on their investments and is better suited to their trading style and long term investment goals. We have put together a list of information that traders should consider when deciding which market to trade in. This information could also be useful to you if you’re currently trading in either the Forex or binary market and are considering switching to the other. If you’re considering trading in the Forex market, Fibogroup is an ideal online Forex broker to start with.
When comparing the Forex and binary market options, one of the most crucial factors is comparing the two in terms of risk management. The Forex market comes with a higher level of volatility than the binary market, and most experts agree that Forex is far riskier with trades than binary, as there will always be a guaranteed loss level on a contract. In addition to this, the Forex market is also marked with high leverage, meaning that although the possibility of a much higher gain is enhanced, this can also go in the opposite direction – with large leverage levels having the potential completely deplete your trading account. If you’re planning to enter the Forex market, it’s crucial that you have a solid risk management plan in place and exercise good trading discipline to minimise the chances of your losing money.
With the binary market only open for trading at certain times – usually working hours – more and more professionals who are considering getting into trading are opting for the Forex market, which is a lot more flexible as it’s open for twenty four hours a day, five days a week. If you are considering entering the Forex market because of a time issue, it’s strongly recommended that you set up a Forex trading schedule – don’t think just because it’s open for trading 24 hours that you should trade around the clock!
Risk and Reward Balance
In binary trading, there is a unique pay out structure which allows traders to gain a risk to reward ration that is favourable as well as being put in place automatically when positions are opened. This is attractive to many traders, as you will know whether or not you stand to win or lose before your position is live. However, with Forex, wins and losses are more variable and therefore more difficult to predict. The trader is responsible for all potential profit and loss calculations, leave a lot more room for error which could have an adverse effect on your savings account.
Did you choose to trade in the binary or Forex market, and why? What are the main advantages and drawbacks of the decision you made?