Forex vs binary options- it is very difficult to say which one is more profitable forex trading or binary options trading. Both of these trading types have their advantages and disadvantages, and in fact, each type is suitable for specific types of the personalities of traders. For example, certain traders are comfortable with binary options, because it is simpler, quicker, and more convenient than forex trading.
In contrast, some traders prefer forex trading, because they feel it can bring them a lot of money as long as they know how to understand the latest news related to the macroeconomics of the country and how to properly read charted data. Here we will mention some major factors that determine the profitability of both trading options. Read thoroughly and decide which one could be more profitable for you and then choose.
1- Ease of Trade
Binary options trading is much easier compared to forex trading. You can start trading binary options in a few simple steps. You can start trading by following easy steps:
- Choose asset
- Choose the amount of money you want to invest
- Enter your desired expiry time
- Confirm the trade
On the other hand, forex trading is much more complicated and depends on the needs and goals of individual traders. A forex trader has to set up various functions and settings before starting a trade.
2- Risk Element
The risk factor in forex trading is very high and many traders are more likely to lose their investment in forex. On the contrary, binary options trading is very much less risky and more suitable than forex trading, especially for novice traders.
The major factor that increases the risk in the trading forex market is that most trades are leveraged. It means that the profits in forex trading are multiplied, but the losses are also multiplied. Huge losses are devastating for new traders. Therefore, it is highly recommended for novice traders to avoid the forex market until they have some experience in trading. In contrast, binary options offer better leverage conditions and give refund options that can be used to restore a fraction of your total investment in case the trade is not successful.
3- Profitability factor
The forex market is highly volatile due to which profits can be high. But, as mentioned above, forex trading can also be leveraged which could also cause greater losses.
Binary options, in general, are not as profitable as the forex. But, they involve lesser risk. Binary options do not offer leverage investment.
4- Ease of Accessibility
The forex market is easier to access than the binary options market. It is open and active 24 hours a day and 5 days a week. The easy accessibility to the market allows the trader to react fast to financial news and world events.
In contrast, trading the binary options is bound to a fixed daily timetable within respective market operating hours. For example, the London session period.
Nevertheless, the whole depends on your knowledge, experience, bank balance, and many other factors.