Discovering The Truth About Investments

Selecting between Forex Trading and Binary Options

Forex and Binary Options are two different methods of trading. Before you even start trading, you should know what makes these two trading platforms different. This is important so you will know what is the best method for you considering your personal style and preference.

Comparing two currencies and speculating on their values is basically what Forex trading is all about. There is always a pair involved when you are trading. In binary options, however, predictions are made whether there is an increase or decrease in the asset over time.

Margins are important in Forex trading. The margins that can be used in trading are decided by the brokers. With this known margins, the traders are able to increase the investments they make in the market in order for them to make larger trades and profits even with a small account.

Margins are not used binary options trading. Because they can make big profits, margin is still an option for traders. In binary options trading there are no margin calls.

The maximum profit that a Forex trader can make cannot be fully known. When the trader gives a stop order then he will be guaranteed a percentage of profit and trading is stopped at a particular time. In some ways, Forex trading is able to manage losses. In binary trading, the amount you can lose or the payout percentage you can get is already known even before you place a trade. Different binary option payout are due to what the broker decides.

Selecting the closing position is possible in Forex trading. The broker immediately executes the closing of the trade, whenever the market is open. Before place a binary option trade, a trader can also choose when the option will expire. It can be as soon as an hour, or it can take as long as a week, etc. Expiry time automatically closes all trading. It is possible to get predetermined expiry times on different options from brokers.

Forex trading offers many types of orders. The popular types of orders are buy, sell, limit, stop, trailing stop, and hedge orders. On binary options you have five types of orders which includes, high and low, boundary options, touch and no touch, 60 second options, and option builders.

Brokers also allow trading in micro lots. These micro lots can be a thousand units of the basic currency. The maximum amount that can be traded is also determined by the broker. It is quite the same in binary options trading in that the broker is the one who determines the minimum and maximum trade size. The minimum trade can be as low as five dollars and the maximum amount is up to five thousand dollars.

The basic differences between Forex trading and binary options trading has been laid out above. Whatever trading platform your want to use, you can do so to make a profit for yourself.


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