Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

omipin

Binary Options Vs. Forex Trading

Recommended Posts

Article By Thebinaryoptionsbroker.com

 

Binary Options Vs. Forex Trade

 

For any trading investment, investors must compare binary options vs Forex trading factors appropriately. In the past few years, binary options are becoming most common. The main reason being the options offers high profit returns and are easily traded. The binary option involves the betting over a currency pair that it will expire in-the-money. If positive, it returns a fixed amount, not withstanding how far the option goes. At times the option only pays off only if the option goes in-the-money, regardless of price at expiry. For example if a binary had a strike price of 1.3, the long position would return $100 per contract regarding the higher price than strike price at expiry. The options are standardized and traded on exchanges. On the other hand, in Forex trading, there are many shared features. They also provide the opportunity, but not the need to buy (call) or sell (put) a certain underlying asset at a particular price (strike price) by or on a particular date (expiry date).Forex trading does not involve currency pairing, but rather the future trading on the currency pair. It is the exchange-traded agreement to buy or sell at some point for a price that relies on initial factors.

 

When trading options, one has to predict if the price of an asset will go up or down from its current value over a given period of time. For instance, the current price of USD IS 1.31 and one thinks its might increase in the next hour. The individual can place the bet and wait for the one hour. Any correct predictions result to up to 80% profit on one's investment. While, Forex trading one speculates that the value of a particular currency will increase or decrease in comparison to another, with a target of making profit. For instance, when the current price of a currency is 1.4 and one thinks the price will shoot in the near future. One buys 1 lot of the currency pair and wait for the price to increase until the desired point before closing the trade at profit.

 

In options, margin is not used when trading. People can still make great percentage profits on their investments, so traders find binary options very attractive. The advantage is that an investor can never get a margin call. While in Forex trading, people use margin to trade. Each broker determines the maximum margin and sometime it can be up to 1:500. Margin allows investors to increase their investment capitals so that they can make an increased trade and make more profit for the winning trades.

 

In binary options, before making a trade, the investors will know the exact payout and loss return percentages to be made for the particular option at expiry. Brokers can offer payouts up to 80% or even more depending on the option traded. Other brokers never offer loss backs, this means that if an investor's option trade is a losing one, the investor will definitely loose the invested amount and not more. In Forex trading, the investors never know the maximum profit to be made on a particular trade. The investor can always regulate an order and be guaranteed some percentage profit if a stop regulation is initiated. Any losses and profits in Forex trading can be managed with the regulations to limit or stop orders. Actually, the maximum loss in this trading is an investor loosing all the money in the trading account.

 

In binary options, there are no spreads, swap or commissions when trading. While in Forex trading, an investor has to consider the spreads and swap, and any commissions.

Each broker in binary options determines the maximum and minimum trading size for their clients. Sometimes the maximum amount can be up to $5000 and the minimum up to $5 per trade. While in Forex trading, brokers allow their clients to trade smaller lots such as 1000 units of the base currency in the trade. They also determine the maximum trading amount.

 

Binary options are available in five types which an investor can choose to trade. They include; 60 seconds option, high/low, touch/No touch option, option builder and boundary option. In Forex trading, there are a variety of order types. The most essential ones are the market orders of buying/selling. Other advanced orders include stop, OCO, trailing stop, limit, hedge orders among others. Therefore, investors must be able to lay out the factors of binary options vs Forex trading in order to choose an effective investment.

Share this post


Link to post
Share on other sites

I really like your article......I edited a bit in order to avoid the advertising you were making and I am telling you this because, again, I really like the topic...

 

I said on a different thread that regardless how controversial binary options are, they offer a trader (a diversified trader) discipline in the sense that if your option is not expiring in the money, there you go, your stop loss is hit........and in a binary option trade there's no way out........whereas in foreigh exchange you can change your mind and hope/pray/wish for something to happen when chances are close to zero.....

 

again, please develop the thread without advertising and this would be a hell of a thread

 

TW

Share this post


Link to post
Share on other sites

Hi there,

 

How is the payout modeled?

 

You say these options are standardized and traded on exchanges - what exchanges and where is the spec please?

 

Any losses and profits in Forex trading can be managed with the regulations to limit or stop orders. Actually, the maximum loss in this trading is an investor loosing all the money in the trading account.

Please, get a grip and show some respect to your audience here. I don't think anyone here is going to trade FOREX with such extreme leverage that one trade would wipe them out. With binary options you could still bet your entire account on one trade and lose it all.

 

The R/R you mention does not interest me as it is less than 1:1 - and you said 1:0.8 was a maximum!

 

I've dabbled with barriers before and found the added element of time to my trade idea tricky. The better payouts were in the 2-4 week area. I found it a lot harder than trading the futures/spot markets.

 

Hopefully some of the more experienced chaps can chime in (zdo?).

 

With kind regards,

MK

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Similar Content

    • By freetrading
      I won $75 in the weekly CloseOption binary options trading contest.

      You can also win if you register for free using the link below.

      Every week there is a contest with a total prizes of $1,000.

      https://www.closeoption.com/referral/2121479907845

      Read CloseOption Broker Review and Find How to Receive 10$ Binary Options No Deposit Bonus
       
       
    • By Jonh Smith
      I searched in google with keywords best forex robot 2019 and in the end I found fxflightproEA from their website fxflightpro.com . if anyone has ever bought, I was interested in their ea. I saw a very small drawdown, and monthly profit looks great.and I see myfxbook profit reaching 50% in 50 days. if there are buy please review here and I say thank you if anyone would like to share here.

      thanks
    • By StraussX
      Hi GUYS, Happy Wednesday!
      I'd like to share daily forex analysis from Followme, hope this information helps your trading.
      Today, Let's focus on AUD and NZD.
      AUDUSD is trading at 0.6761; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 0.6765 and then resume moving downwards to reach 0.6635. Another signal to confirm further descending movement is the price’s rebounding from the descending channel’s upside border. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6825. In this case, the pair may continue growing towards 0.6905.
       
      NZDUSD is trading at 0.6447; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test the cloud’s downside border at 0.6455 and then resume moving downwards to reach 0.6315. Another signal to confirm further descending movement is the price’s rebounding from the resistance level. However, the scenario that implies further decline may be canceled if the price breaks the cloud’s upside border and fixes above 0.6525. In this case, the pair may continue growing towards 0.6645.
    • By millonmethod
      Hello everyone!
      I am an advanced trader, with many years of experience (about 15 years - 10 living exclusively from this)
      I am going to give you some tips that you must know:
      There are going to be many people who tell you that trade is easy, that with only crossiing a line  with another one you will win a lot of money.... and that´s not true.  No, Sir, reality is far away from that. Many people who start arrive here with the hope that someone "gives them" a free method, they watch youtube videos thinking that this will give them the "strategy" and in a few days they realize that it does not work for them - they lose money - and then They go looking for a new one ... and so on. YES, IT´S TRUE YOU EARN IN TRADING, A LOT. BUT THINK: for a few to win (10% + any BROKER) many others must lose (90% people). YOU MUST HAVE A MONEY MANAGMENT FORMULA ( you can email me) People study so many years to live on this, not because they are dumb, but to know what they do, when, and have absolute effectiveness. It´s very easy to get lost here: do not disperse, jumping from one to another strategy WILL NEVER give you money, it will only waste your time and make you nervous when trading. PEOPLE WHO CHANGE THEIR METHOD CONSTANTLY : LOOOOSE ALWAYS.   If you have the knowledge to develop it, take your time and do it.  Always try it first on DEMO for at least 2 weeks! If not: search to buy a solid strategy (no you tube videos pleassse ! Avoid losing money! ) This is like any business, it requires some capital to start (capital = money in the broker + solid made /purchased strategy) If you are lost: I RECOMMEND YOU NOT TO WASTE TIME IN YOUTUBE, JOIN PEOPLE WHO HAVE EXPERIENCE AND IF YOU ARE GOING TO BUY A METHOD ... PLEASE !!!! DO NOT BUY 10 BAD AND CHEAP METHODS, SAVE MONEY AND BUY ONLY 1 BUT EXCLUSIVE AND MUST ALLWAYS HAVE SUPPORT !!!!!  Do not buy Signals! They never keep up with constant profits! One week will win and the next will lose. Nothing that does not depend absolutely on you will give you the money you are looking for. And if you do not have a strategy (made or purchased) do not even try PLEASE PLEASE PLEASE: DO NOT USE REAL MONEY! AT LEAST 2 WEEK DEMO FREE HELP HERE!!!!!  IF YOU FOLLOW MY ADVICE YOU WILL BE PART OF THAT 10% WINNER, email me.
      Have a nice trading day
       
       
  • Topics

  • Posts

    • Agreed since some of the new traders usually lose money in start and some loses more while chasing their lost money and eventually ends up blaming to their brokers part.
    • The crypto market are also in phase of maturing like the forex and other trading assets so we can do much more accurate analysis than before since early days it was purely a luck if the investments in crypto bears results because most of the coins or tokens never come to fruition. Some early birds were also able to make profits on these tokens or coins. e,g., like turtle coin starts with 1 satoshi and go up to 7 sathoshis, quite good rewards. another token lmgx now hovering at 10 started from 1, 
    • How's about other crypto exchanges? Are all they banned in your country or only Binance?
    • Be careful who you blame.   I can tell you one thing for sure.   Effective traders don’t blame others when things start to go wrong.   You can hang onto your tendency to play the victim, or the martyr… but if you want to achieve in trading, you have to be prepared to take responsibility.   People assign reasons to outcomes, whether based on internal or external factors.   When traders face losses, it's common for them to blame bad luck, poor advice, or other external factors, rather than reflecting on their own personal attributes like arrogance, fear, or greed.   This is a challenging lesson to grasp in your trading journey, but one that holds immense value.   This is called attribution theory. Taking responsibility for your actions is the key to improving your trading skills. Pause and ask yourself - What role did I play in my financial decisions?   After all, you were the one who listened to that source, and decided to act on that trade based on the rumour. Attributing results solely to external circumstances is what is known as having an ‘external locus of control’.   It's a concept coined by psychologist Julian Rotter in 1954. A trader with an external locus of control might say, "I made a profit because the markets are currently favourable."   Instead, strive to develop an "internal locus of control" and take ownership of your actions.   Assume that all trading results are within your realm of responsibility and actively seek ways to improve your own behaviour.   This is the fastest route to enhancing your trading abilities. A trader with an internal locus of control might proudly state, "My equity curve is rising because I am a disciplined trader who faithfully follows my trading plan." Author: Louise Bedford Source: https://www.tradinggame.com.au/
    • SELF IMPROVEMENT.   The whole self-help industry began when Dale Carnegie published How to Win Friends and Influence People in 1936. Then came other classics like Think And Grow Rich by Napoleon Hill, Awaken the Giant Within by Tony Robbins toward the end of the century.   Today, teaching people how to improve themselves is a business. A pure ruthless business where some people sell utter bullshit.   There are broke Instagrammers and YouTubers with literally no solid background teaching men how to be attractive to women, how to begin a start-up, how to become successful — most of these guys speaking nothing more than hollow motivational words and cliche stuff. They waste your time. Some of these people who present themselves as hugely successful also give talks and write books.   There are so many books on financial advice, self-improvement, love, etc and some people actually try to read them. They are a waste of time, mostly.   When you start reading a dozen books on finance you realize that they all say the same stuff.   You are not going to live forever in the learning phase. Don't procrastinate by reading bull-shit or the same good knowledge in 10 books. What we ought to do is choose wisely.   Yes. A good book can change your life, given you do what it asks you to do.   All the books I have named up to now are worthy of reading. Tim Ferriss, Simon Sinek, Robert Greene — these guys are worthy of reading. These guys teach what others don't. Their books are unique and actually, come from relevant and successful people.   When Richard Branson writes a book about entrepreneurship, go read it. Every line in that book is said by one of the greatest entrepreneurs of our time.   When a Chinese millionaire( he claims to be) Youtuber who releases a video titled “Why reading books keeps you broke” and a year later another one “My recommendation of books for grand success” you should be wise to tell him to jump from Victoria Falls.   These self-improvement gurus sell you delusions.   They say they have those little tricks that only they know that if you use, everything in your life will be perfect. Those little tricks. We are just “making of a to-do-list before sleeping” away from becoming the next Bill Gates.   There are no little tricks.   There is no success-mantra.   Self-improvement is a trap for 99% of the people. You can't do that unless you are very, very strong.   If you are looking for easy ways, you will only keep wasting your time forgetting that your time on this planet is limited, as alive humans that is.   Also, I feel that people who claim to read like a book a day or promote it are idiots. You retain nothing. When you do read a good book, you read slow, sometimes a whole paragraph, again and again, dwelling on it, trying to internalize its knowledge. You try to understand. You think. It takes time.   It's better to read a good book 10 times than 1000 stupid ones.   So be choosy. Read from the guys who actually know something, not some wannabe ‘influencers’.   Edit: Think And Grow Rich was written as a result of a project assigned to Napoleon Hill by Andrew Carnegie(the 2nd richest man in recent history). He was asked to study the most successful people on the planet and document which characteristics made them great. He did extensive work in studying hundreds of the most successful people of that time. The result was that little book.   Nowadays some people just study Instagram algorithms and think of themselves as a Dale Carnegie or Anthony Robbins. By Nupur Nishant, Quora Profits from free accurate cryptos signals: https://www.predictmag.com/    
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.