Binary Options vs. Forex Trading: Understanding The Difference

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A lot of people out there often confuse binary options with forex trading whereas the truth is that both these forms of trading are totally opposite to one another. Yes, you read it right and today we are going to bring this confusion of yours to an end. For starters, you need to understand trading properly or else you won’t be consistently earning profit out of this business of yours. Without learning to trade itself, yes, you might win something big in the beginning, and that would only be your “luck” but luck won’t work every time and the next time you play big, you might even lose more than what you could ever imagine. Long story short, you should be teaching yourself a job for life before getting started with it and same is the case with trading.

The Difference Between Both The Trading Types

Now, as far as the difference is concerned, well, when it comes to binary options trading, you need to know that your return is always fixed. For example, let’s say 70% is the common return percentage but this too varies from broker to broker and trade to trade. Speaking of a broker, you should always be very careful with choosing one and always the first search for top binary option broker before dealing in this type of trading because your profit depends a lot on your broker.

On the other hand, when it comes to Forex trading, your return isn’t limited or fixed and it can vary every time you trade. As a common example, you can say that when it comes to Forex trading, the return is always 200% and sometimes even more than that.

Another major difference is that in binary options trading, you actually assign a time to your trades and after that time your trade expires. But that’s not the case with Forex trading and in this case, you need to predict a target area for the trades you make.

Forex Trading

For Forex trading, you need to understand and keep the rule in mind that you can exit the trade just as you like it. It depends on you and your predictions about the profit and if you predict right and end the trade on the right time, you can actually win a lot of money but if you don’t exit the trade on the right time then yes, you will have to face some serious loss.

Binary Options Trading

Things are totally different in binary options trading and the major difference is that you decide a time frame and within that time frame you either you get lucky or lose the trade. The time frame can be anywhere between 1 minute to 1 hour, it all depends on you and you get the profit or lose the money after the trade expires. Yes, sometimes some brokers do let you break the trade but then again that happens with a condition and that is lesser return rate. So, if you don’t mind less return then yes, you can always break the trade in between.

Overall Verdict

We hope you now understand how binary options is different from Forex trading. You just need a  platform like IQ option to begin with trading.  So, no matter what type of trading you are interested in, you should first gather enough knowledge on that type and then get started so that even if you lose some money, you lose less. As far as our suggestion is concerned, well, you should opt for binary options especially if you are a beginner, at least, in this case, you’ll know the return you will be getting on each trade you make.

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