Forex vs Binary Options Binary Option’s main advantage over Trading Forex is the defined and limited loss that you can incur on any trade. When you buy a Binary Option you know at the start, what your maximum loss will be. It is defined by the cost of the option itself. You may also define your loss trading Forex by adding a Stop Loss order to your position, but two things can then come into play; A volatile break in price against you where you were planning to stop your losses after, for example, 30 pips, but you end up being stopped after more than 30, due to market volatility. The temptation to move your Stop Loss as the market gets close because you feel the momentum is not going to last. In the end this could cause you to lose much more than you had initially thought of risking in the trade. In other words it can take away the need for disciplined risk management. Often traders end up trading emotionally which can eventually be disastrous. With Binary Options your maximum loss is always fixed and there are no risks of losing more. This is also connected to the concept of volatility, with a Binary Option it doesn’t really matter how the market moves as long as it ends up in the money at expiry, whereas having a Forex position can often see you take a loss due to the high volatility of the market to then see the price move back in your favour. While both trading methods share many common features, there are additional elements that set each apart: Leverage. Binary options are generally offered without leverage. Traditional Forex often provides large amounts of ‘gearing’. Leverage is a double edged sword. Some traders will demand the extra profit potential it gives, others will be concerned about the losses that could result in leveraged trades. Risk. Risk and reward is clear out the outset with binary options. The best and worst case scenarios are both known. In more traditional forex, the profit or loss may not be clear until the trade is closed. Leverage magnifies this issue. Capital requirements. Traditional forex will require more cash on account than binary options. Flexibility. Binary options can provide Touch and Range options in a simple way. The same trade profile can be achieved with conventional forex trades, but it needs more thought on behalf of the trader. Fixed Expiry. Forex traders can move in and out of trades without a definitive end point on any of them. Binaries require a specific expiry to be set at the start of the option. Monitoring. A binary option can be left to mature at expiry, with no additional risk. A forex trade needs to be monitored incase there are sharp price movements that might trigger stop losses or similar. Binaries can of course, be traded throughout as well, so some traders may prefer to monitor binary positions also. Got questions? ask at: http://bit.ly/2IblW9d #NMBO483

Forex vs Binary Options

Binary Option’s main advantage over Trading Forex is the defined and limited loss that you can incur on any trade. When you buy a Binary Option you know at the start, what your maximum loss will be. It is defined by the cost of the option itself. You may also define your loss trading Forex by adding a Stop Loss order to your position, but two things can then come into play;

A volatile break in price against you where you were planning to stop your losses after, for example, 30 pips, but you end up being stopped after more than 30, due to market volatility.
The temptation to move your Stop Loss as the market gets close because you feel the momentum is not going to last. In the end this could cause you to lose much more than you had initially thought of risking in the trade.
In other words it can take away the need for disciplined risk management. Often traders end up trading emotionally which can eventually be disastrous. With Binary Options your maximum loss is always fixed and there are no risks of losing more.

This is also connected to the concept of volatility, with a Binary Option it doesn’t really matter how the market moves as long as it ends up in the money at expiry, whereas having a Forex position can often see you take a loss due to the high volatility of the market to then see the price move back in your favour.

While both trading methods share many common features, there are additional elements that set each apart:

Leverage. Binary options are generally offered without leverage. Traditional Forex often provides large amounts of ‘gearing’. Leverage is a double edged sword. Some traders will demand the extra profit potential it gives, others will be concerned about the losses that could result in leveraged trades.
Risk. Risk and reward is clear out the outset with binary options. The best and worst case scenarios are both known. In more traditional forex, the profit or loss may not be clear until the trade is closed. Leverage magnifies this issue.
Capital requirements. Traditional forex will require more cash on account than binary options.
Flexibility. Binary options can provide Touch and Range options in a simple way. The same trade profile can be achieved with conventional forex trades, but it needs more thought on behalf of the trader.
Fixed Expiry. Forex traders can move in and out of trades without a definitive end point on any of them. Binaries require a specific expiry to be set at the start of the option.
Monitoring. A binary option can be left to mature at expiry, with no additional risk. A forex trade needs to be monitored incase there are sharp price movements that might trigger stop losses or similar. Binaries can of course, be traded throughout as well, so some traders may prefer to monitor binary positions also.

Got questions? ask at:
http://bit.ly/2IblW9d

#NMBO483

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