It is not a secret that forex trading and binary options have a lot in common. Both require fundamental knowledge about markets and price movements. Also, most of the trades are made on fluctuations of prices of currency. But the main question is, which one is easier to profit from.
Simplicity of analysis
Each forex trader knows that there are numerous indicators and analysis techniques. Furthermore, market analysis for forex requires estimations of significance of changes. You have to make predictions not only on movements, but also on their size in order to decide
whether you should involve yourself into trading. In binary options trading things get simpler. Of course, it is not true that it does not require any type of analysis. But the required analysis should not measure significance of movements. You just have to know direction of movement and that would be it.
FX trading mainly allows you to trade currency pairs. Of course, there are brokers that allow you to trade commodities or CFDs. But most of the time you either have to increase your deposit amount or get new account type, which also requires some changes to be made or trading volumes to be met.
On the other hand, trading binaries is not limited to currency market only. Most of BO brokers will allow you to trade on some set of commodities and stocks. This will give you additional trading opportunities. Also, there are binary options brokers that allow you to trade bitcoins, which is even better.
Your FX trades are always exposed to liquidity risks. Do you remember what happened on Black Thursday? Main reason of significant losses on that day was lack of liquidity. If there was enough demand on that day, the situation could be totally different and most of victims would still have their deposits.
In the binary options world there are no liquidity risks. You trade with your broker and there is no risk that at some point there would be not enough demand to buy your Put option. This makes binary options totally liquid and therefore decreases risks that are involved in their trading.
So what is better?
As this article suggests, there are areas in which binary options do perform better than fx trading. But it does not mean that you should quit your forex trading career and make a huge deposit at one of the binary options brokers.
In case these factors are crucial for you and you suspect that they were the main force that kept you from trading success, probably you should go for binary options. On the other hand, if you are successful fx trader, probably you should not change your path. If it is working for you there is no reason to change it.
This post has been provided by www.binaryoptionshub.com,, your reliable guide in options world.
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