Binary options or Forex, which is better?

Disputes over classics and innovations accompany all spheres of human life and activity. In this matter, the financial markets are not an exception. The emergence of innovative tools on the market – binary options – has led to disputes over all aspects of the situation: which are better, binary options or forex, the classics or market innovations. These questions are of interest not only to private traders, but also to industry professionals. We will briefly analyze the profitability parameters, and the accessibility and ease of processes using these tools, to identify the leader.

Classic Forex currency market

Let’s start with the classic Forex currency market. What we have is a private investor who, in order to gain access to transactions, is required to have a relatively large amount of initial capital. The main trading platforms have minimum conditions for the initial capital at the level of 200-300 dollars! This figure is not so much due to the greed of the brokers, but rather because of the rules of money management that are used in this market area. It simply does not make sense to enter the market with a smaller amount – the level of risk increases significantly and profit volumes fall.

The next parameter is the simplicity of trading processes. It is worth noting that the principle of buying and selling foreign exchange market assets requires the most professional skills from the trader, since forecasting quotes in this case takes on a complex analysis format. Moreover, the exact time period for profiting in this case has quite a few serious criteria – contracts on the Forex market have durations from a few hours to a few weeks, which complicates the work of the trader in terms of the effectiveness of money management. And, of course, the profitability of the tool – traders on the Forex market say that a good result is an increase in their trading capital of 20-25%. You have to agree that those are rather modest results.

Looking ahead, it is worth noting that some of the major players on this market have started to offer binary options on Forex platforms, which indicates a rise in the popularity and effectiveness of binary contracts in private trading.

What does the binary market offer?

Based on the main criteria, the innovative tool for private trading offers the following parameters:

• Access to the market with minimal investment. For an example, we’ll consider the trading conditions of the leader of the binary market, the Binomo broker. Here, the trading conditions have the following parameters – an initial account of 10 USD, an initial bet of 1 USD

• As for the ease of conducting binary options trading processes, they also outperform Forex. Here, they utilize short time periods for contracts – from a minute to a day, simple approaches to determining short corrections and trend movements, as well as a simplified format for profiting – a correct forecast brings a fixed profit

• Yields on binary options also show the highest possible results. Due to fixed rates of profit on contracts at the level of 85-90%, and the quick trading mode, binary options are capable of bringing investors up to 3,000% profit per year

So, in this case, the dispute over “Binary options or Forex” is not quite appropriate, as the innovative tool beats the classic one on all the parameters, and is more profitable for private investment.