Binary Options Trading Versus FOREX

“Learn about the differences between binary options and FOREX and about the benefits of one over another.  Find out about trading with investments that are best.”

Binary Options Trading and FOREX Trading

When investors start to look at the market and to think about where they want to invest, how do they begin? There are so many investment vehicles that it’s often difficult to make a decision. By comparing some of these options, an investor can make a more educated decision for himself and for his investments. First, we will give an overview of binary options trading to get a feel for this type of investment trading. Then, we will look at FOREX trading. Finally, we will make comparisons to help investors to make decisions for themselves that are educated.

The Binary Options Trading Process

The binary options trading process has quickly become a well appreciated and well used form of investing. It’s a straight-forward investing model and one that attracts people for this reason and others. The process with binary trading is quite straight-forward. The investor selects an asset to follow and draws conclusions about what will happen with that asset in a given amount of time. He then decides how much he wants to invest in the outcome that he predicts will come to fruition.

Options with Trading in Binary Trading

The binary trading process allows for many options. The investor can decide to invest on a Range, meaning that the asset will come within (Inside) a specific price range in a given amount of time or that it will be beyond (Outside) that range. They can bet that the binary trading will be High, meaning they’ll be priced higher than the starting price by expiry; or Low, so they’ll be lower than the starting price at expiry. They can also say that the binary options will touch (Touch or One Touch) a certain price within the time allowed or not touch (No Touch).

FOREX Trading

Now, with FOREX trading, you are buying and selling foreign currency amounts. FOREX is all about trading in currency pairs. Investors are always trading the base (the first currency). Your job is to predict what will happen with one currency in respect to the other one. Will the Euro fall, for instance, against the US dollar or will it remain strong? Obviously, the FOREX trading market tends to be greatly influenced by economic, political and other factors that hit the world economy. It’s vitally important to stay on top of current events with FOREX trading and to understand the fluctuations in currency trading and the reasons for potential changes.

Advantages and Disadvantages

With that brief overview, it’s time to evaluate the benefits of binary options versus FOREX. FOREX requires that you focus on currency exchanges and amounts, which tends to limit the investor. With binary options, the investor can focus on a huge range of assets, allowing for a great deal of variety and for a change of focus as desired. Many investors have found that with binary options it is harder to loose money and easier to make it. Why is this the case? The main factor here, and the piece that is essential for investors to understand is the following. With FOREX you will win more or loss more based on how much the market moves. This creates a great deal of nuance in the trading process and requires you to be finely tuned to the incremental differences in currency changes. With binary options, however, you only have to be correct about the direction of the movement, not about the specific amount that it moved. This offers a great deal more flexibility and more ways to make a profit from your investment.

More Thoughts on Trading

Of course, in addition, with FOREX the investor needs to be acutely tuned into the currency market. They need to know what currencies seem to be rising against other currencies at the moment, and how the interconnectedness of various currencies influences their fluctuations. This is very specific, and more fine tuned than are many investors. For this reason, binary trading may be more suitable for a larger amount of investors. They have the option of knowing about various assets and about selecting one asset to focus on today and another on a different day.  Certainly, these decisions have to come for each person individually, but it’s important to have a point of comparison.

This entry was posted in Options Trading Currencies and tagged , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *