Forex trading has been available for a number of years, but binary options are the new kid on the block. Investors are curious to know the differences between these 2 categories of trading. The analysis below provides the answer to which one of these is most effective and profitable to trade today!
Forex trading requires special trading skills, so beginners have a hard time getting started with this trading instrument. The benefit of the foreign exchange market is that it is very liquid by being available 24/5. Trading in this market involves leverage, enabling traders to trade with much more money than they put into a trade. For example, with 1:400 leverage and a $1000 investment, you are controlling $400,000. So traders can make money from forex, but in over 90% of cases traders’ accounts are wiped-out by being over leveraged.
Binary Options Trading
Traders trade binary options with the world’s leading currencies, stocks, indices and commodities on their preferred trading platform. A notable benefit of this new and innovative trading instrument is that no software download is required, allowing traders to trade from their desired computer. A key advantage that binary options offer over forex is the absence of the leverage factor. As a result, your funds are protected, while you can make a lot of profit in each single investment. Many traders have chosen to trade binary options more recently due to the ability to get started without prior trading experience.
The Preferred Option
Binary options brokers out there let you start trading from as low as $1 per trade. This is important, because from this small sum there is a realistic profit potential. When comparing this to forex trading, the minimum investment is often $100-$1000, more than most traders are willing to layout. As for the deposit methods, the binary options brokers now offer PayPal and other easy methods. With more and more traders yearning to control their own trading strategies, binary options look to pull the steam out of forex trading.