Posts Tagged ‘forex’

Binary options or Forex trading?

When it comes to trading financial means, the two different forms of trading that have become the most popular by far, is Forex Trading and Binary options. These are two trading instruments that are used on the same markets, but they work differently, and in this article I wanted to give an answer to which form is the best. As you might have imagined, it all boils down to personal preference obviously, but we can still go over some of arguments as to one of them would be better than the other.

Personally, I think it might be easier to start off with forex trading, as it is just so easy to understand the basic principle of it. It only takes a minute to explain how it’s done, and then you could basically set up an account and start trading. In forex trading, you simply buy different currencies at a low price. The idea is then to profit by selling them again when the price have gone up, just as you do in any form of trading. However, the key to forex trading lies within your knowledge of the market, and what sort of events will make it turn a certain way. It’s when you’ve got enough knowledge that you will know when the market is about to turn, and in that way you are then able to know just when the time is right to buy a certain currency. When you start trading forex, you are obviously not going to possess the full skill set necessary to know this with certainty, so I would advice that you start of with pretty small investments, and then slowly work your way up in the world as your knowledge and confidence grows.

In binary options, the actual trading looks a little different, although the principles are the same. Here again, it’s all about being able to predict the twists and turns of certain assets on the market, and profit from being right in your predictions. When you are trading binary options, you are not actually buying a currency, but you make an investment based on the prediction that the asset will either increase or decrease in value in the near future. This means that you can’t “stop” your trade if you prediction looks to be wrong. This you would be able to do in forex trading on the other hand. If you buy USD for example, thinking they will increase their value, and they start decreasing heavily instead, you can sell them quickly in order to cut your losses. You don’t have this option in Binary Options, where you will lose you full investment if you are wrong in your predictions. Click here to read more about what binary options is all about!

So, as I said, it all comes down to personal preference. If you are a high risk trader, you are likely to think that binary options might be the better option, and if you are more of a safe player, you might prefer forex trading!