Forex Trading vs Binary Options Trading is the topic of this article. Many traders don’t know about the differences between these two type of investment tools. Because there are confusions about Forex Trading and Binary Options Trading in the market among the traders. I am Oscar J. from Legit Binary Options Review discuss with you here about these two financial trading tools differences. Stick with me for better understanding about Forex and Binary Options trading.
Here we go.
Forex Trading vs Binary Options Trading: Differences
Forex and Binary Options are two different investment tools of financial market but they are psychologically different from each other. While one is time-centric the other one is price-centric. Both of these tool works on time and price but their focus is interestingly different. In most cases, Forex overlooks the time factor for trading and it can be a very big mistake.
In this case, binary options trading is more balanced considering both time and price. This factor makes binary option an all-rounder trade. Within the trade expiry time, binary options force one to exit the position and result as a win or lose. It the nature of binary options trading which shows the focus on risk management and discipline.
You will see the lack of discipline in forex trading. Because for a losing trade most trades holding their positions for a long time period. And this cuts the shorter time period’s winning positions. This is totally impossible in binary options trading because of the trade’s expiry time. You will always see a result as the win or lose in binary options.
For example, in binary options trade an EUR/USD with 10 minutes of expiry time. As a trader, you will have more focus on this trade than forex trading because forex only focuses on price not in time. That gives the traders more trouble. Psychologically focus on the trades can able to make you a successful trader.
If a trader buy a position in forex and believe that it will increase in price but the value does not rise and started falling otherwise, then most of the forex trader tendency is to wait as they hope the price will rise. This is being a trap for the traders for a losing trade because they do not have time plan for the trade and it’s getting worse. This proves the lacking of the discipline of forex trading.
It’s the nature of binary options trading which forces the trader to set both trade Expiry Time (X) and Price Range (Y). Simply this will make you a good trader from the beginning of your trading. But you should remember that in binary options trading if you win a trade you will get 70%-90% profit of your investment but if you lose you will lose your 100% investment for that specific trade. So it is necessary that your win rate average should be 54%-58% to avoid lose.
Many binary options traders do revenge trade or over-trade for the above cause is bad as the adding or holding the position of forex trading. To be a successful trader you have to control your emotion and execute money management carefully.
As the summary, if you want to start trading, binary options will give your better options with a solid foundation to learn to trade. It’s simple and focuses on both time and price which is like to look both sides of a street before crossing it. Forex only focuses on price and it’s like to look only one side before crossing a street. Overall if you want to be a better trader you have to consider both time and price and learn trading is also will take time and price from you.