Forex and binary options: what a beginner needs to know

If you have just decided to start making money trading, then you have a choice: forex or binary options. We’ll cover this issue in the article, but first, a little cold shower.

10 June 2020

If you have just decided to start making money trading, then you have a choice: forex or binary options. We’ll cover this issue in the article, but first, a little cold shower. You have probably seen a lot of commercials for both BO and Forex, where the emphasis was placed on simplicity and profitability: in BO, trading is done using two buttons, and in forex, robots do all the work for you, just have time to count and spend the profit. In fact, not everything is as rosy as in advertising. If you do not take into account the ECN forex brokers, who actually transfer transactions to the interbank market, both in BO and in forex, the “broker versus trader” model works. Those. It is beneficial for the broker to drain the deposit by the trader, because from this he receives income. Hence the constant attraction of newbies through bright advertising. It is necessary to find the most honest broker who will not help to drain the deposit. Read, for example, about one of the widely advertised binary options iq option reviews: traders write about problems with withdrawal, blocking of accounts with profit, freezing on profitable trades.

Forex and binary options: what a beginner needs to know

Therefore, at least when choosing a forex broker, at least when choosing a BO, try to study all the information on the company and read independent comments, for example, here tradersunion.com. The site contains a wealth of information on brokers, including reviews, monitoring payments and ratings of the best companies.

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Difference between forex and binary options

The main difference is the difficulty for the novice trader. In binary options, you only need to guess the direction of the asset price movement. In fact, the interface consists of several buttons with which we select the amount of the bet, the time of order closing (expiration) and the rise or fall of the rate. BO can be compared to the game “red-black” in a casino, while forex is a preference game, where you need to know a lot of rules, have sufficient experience and an analytical mind to win.

In forex trading, you need to study spreads from brokers, understand how leverage works, understand pending orders, and make important decisions quickly. If in BO practically nothing depends on us, we just wait for the expiration time and see the result, then in Forex we can close a deal with profit or loss until the goal is reached, suspecting that the direction of the rate will change.

If, when trading options, we previously know the possible profit and loss from the transaction, they are limited and fixed, then in Forex we can merge the entire deposit into one order at a time, if we do not set a stop loss, and the price will move in the opposite direction for a long time. At the same time, profit on successful orders is usually only a few percent. All of this scares a lot of newbies, and they choose binary options.

BO profits can be made much faster. While top forex brokers receive about 10% of their income per month (we are considering stable strategies), some of them manage to double and triple their deposits on BOs. But there are not so many such traders, mostly on BOs sooner or later the deposit will be drained. At short distances, analytics does not help, only luck, if you win, you get 80 percent of the profit, but if you lose, you lose 100%. Therefore, over time, with 50/50 chances, your account will be empty. And many brokers will also help this by rigging the rate.

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For myself, I chose forex and trading on crypto-exchanges, which I have been successfully doing for several years. I advise others to decide for themselves, starting from the goals – try to make money quickly right now or spend time and deal with Forex. In any case, now there is a low entry threshold for both types of trading, you can spend a couple of dollars and try both options.



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