Forex trading or binary options trading – which is better? How to choose?

• What is the difference between Forex and binary options?
• Binary options: pros and cons
• Benefits of binary options
• Disadvantages of binary options
• What do binary options and forex have in common?
• Advantages of Forex
• Disadvantages of Forex
• Spread
• Stop loss and take profit
• So what to choose, binary or forex?
• Cent accounts
• Where to use Forex and where to use binary
• From binary to forex and back

Your city is probably full of Forex advertisements, poles and numerous billboards are plastered with it, fabulous promises and castles in the air are everywhere.

Well, Forex is truly one of the most popular and profitable markets in the world. Turnover in 2021 amounted to more than 6 trillion dollars per day. Enormous funds are scrolled every second through electronic networks during currency exchange conversion transactions on the interbank market, which is known as Forex - Foreign Exchange.

However, real Forex is interbank and banks and investment funds trade there. They turn over these trillions. But in Russia and many other countries, instead we are offered a surrogate known as retail Forex. Yes, yes, children. Just as bookmaker binaries are not trading as such, so is all retail Forex not trading as such.

Why are you surprised? Where in the word “interbank” (“between banks”, get it) do you see a retail trader pouring some kind of virtual currency like Qiwi into the account of an offshore office and clicking buttons in the toy Metatrader 4 terminal, which was originally created for Forex kitchens? There is no need to make big eyes.

Real Forex works completely differently. Trading there is conducted in bank terminals Reuters Dealing and Bloomberg, in ECN networks like EBS, banks have mutually opened credit accounts for currency exchanges, the main turnover is swaps, forwards, etc.

Retail Forex is not interbank currency transactions, but bets on currency quotes disguised as “trading” currencies.

However, retail Forex has been around for many years and has partially passed the stage of initially fooling the simpletons (although far from completely). There are now more and more companies on the market that work not only as a “kitchen”, but also bring your transactions to liquidity providers, forming a real market and bringing transactions of clients of hundreds of forex offices together through aggregators and ECN networks. You can read more about this and more in the Forex mini-school, so we won’t repeat ourselves.

By now, the nuances of retail Forex are no longer a particular problem - here, as in binary ones, you need to find a sane, paying Forex office (there are plenty of them here) and be able to take money from it that losers leave there.

The question here is different, purely monetary. Which is better, binary options or forex? What is more profitable, simpler, more accessible? The question is quite relevant, since BOs are often represented by large Forex companies.

Some even allow you to work with binaries directly from the MetaTrader terminal interface, for which you need to connect a small plugin. It would seem that all the conditions are met, but... what to choose?

The answer to this question is very prosaic. Take a look at the graph, what do you see?

These are indicative quotes on the interbank market. Both Forex and BO provide the same thing - the opportunity to bet on these quotes. Your transactions are not displayed on the interbank market, but you work with interbank prices. These candles come from the world of big finance.

Binary and Forex work completely differently, and in some places the difference is radical. And the choice depends on what exactly you need.

Regulation of the BO market

The reputation of binary options suffered greatly in the first half of the 10s. During this period, hundreds of openly fraudulent companies appeared, masquerading as full-fledged BO brokers. Because of this, at least a wary attitude towards this type of instrument has formed.

In the post-Soviet space, work with biological weapons is not regulated in any way. Binary options exist in a “gray zone”; whether the situation will change in the near future is unknown.

But this does not mean that all BO brokers are scammers and you cannot make money from binary trading. Our rating of binary options brokers shows that there is a choice, each company included in the rating consistently withdraws its earnings.

As for regulation, the most stringent regulatory body is the Maltese regulator. His license is the best a BO broker can have.

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Additional features in WForex

Additional features include the analytics section. It will be useful to traders trading binaries, no less than on Forex. Here you should pay attention to the news, market overview and calendar of events (economic calendar).

Currency pair overview

A market overview is a brief summary of the current state of a particular currency pair. For example, the nearest support and resistance levels. It will be useful for novice traders to look here to compare their analysis with the vision of the market from experts.

News in Wforex is a brief summary of events in the market to keep abreast of current trends. And in the event calendar, you can select only important news to open the most profitable deals.

How is Forex trading organized?

Technically, the conclusion of transactions is simplified to the limit. The trader needs to download the terminal from the broker’s website, open a trading account through his personal account, get a login and password, and start trading. This will take a few minutes.

Both market and pending orders are available on Forex:

• Trading on the market - a transaction is concluded at the price current at the time of sending the order to buy/sell. With strong volatility, slippage and requotes are possible, but most traders do not encounter this.
• Regular stop and limit orders - a buy/sell order is placed at the level specified by the trader.
• Sell ​​stop limit and buy stop limit . Available only in MetaTrader5, these are the same stop/limit orders, but with an additional condition - before they are placed, the chart must reach the level specified by the trader.

Features of Forex trading:

• The outcome of the trade is determined by the distance traveled by the chart.
• A trader can fix profit in different ways - using a fixed take profit, trailing stop, or manually.
• There is such a thing as a spread - the difference between Bid and Ask. The company makes money from this; its income does not depend on the outcome of the transaction.
• If a transaction is held open for more than 1 day, then when it is transferred to the next day, a certain amount is debited from the account or credited - a swap.
• Control over the transaction is maintained at any time. The trader can move the take profit or stop loss, remove it, or add TP and SL to a previously opened position.

There are also specific trading tactics available on Forex. For example, locking - multidirectional positions are opened for the same instrument, then the trader opens the lock.

Available on Forex and carry trading - guaranteed earnings through positive swap. The strategy does not work during periods when central banks impose low interest rates everywhere, but in normal times it generates income.

Education

To help novice traders, there is a “How to trade” section on the official website of the company wforex.com. It contains explanatory and educational information on Forex, digital contracts and a knowledge base. Where you can find answers to all popular questions.

Training section

There is no training information in the Wforex trader's account. Therefore, to find it, you need to go to the main page.

In addition, the broker has his own YouTube channel, where you can find many useful and educational videos. Oddly enough, there is not a word about this or even a corresponding icon on the broker’s website. Therefore, you need to search for the channel yourself, but it’s worth it.

Profitability potential of Forex and binary options

The key advantage of BO over Forex is high profitability per transaction. Indeed, one trade in a few minutes can bring a profit of 80-90% of the option cost. But if money management is observed, the situation changes greatly.

When talking about trading profitability, it is difficult to use specific numbers. If over a long period on Forex you manage to achieve a profitability above 10%, this is an excellent result. With conservative trading and a risk per transaction of about 2-3% per year, you can earn more than 100%, that is, at least double your deposit. If you do not withdraw your earnings, then due to compound interest the result will grow exponentially.

As for binary options, high profitability within one transaction does not mean equally rapid growth of capital as a whole. It is more convenient to evaluate the influence of money management using an example:

• Let's assume the trader's capital is $1000. The accepted risk is 2% per trade.
• In one trade, the acceptable loss is 0.02 x $1000 = $20. This will be the value of the option.
• There are 100 trades per month, of which 60 are profitable and 40 are unprofitable. For profitable positions the broker pays 82%
• Due to this, the trader earns 60 x 0.82 x $20 per month – 40 x 1.0 x $20 = $184 or 18.4% of the deposit. Not a bad profit with fairly conservative money management. In reality, there may be fewer transactions, which will slightly reduce profitability.

If you choose Forex or binary options, then in terms of profitability BOs win, but with a slight advantage. With the same approach to money management and comparable trading intensity, binary trading will bring slightly more income. But the deposit will not grow many times faster compared to Forex.

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Withdrawal of funds

In order to top up your deposit and start trading, the broker offers the opportunity to use almost all popular electronic payment systems.

Deposit and withdrawal methods

At the same time, the time for withdrawing funds to any EPS and bank cards is on average 30 minutes. Which is significantly faster than most binary brokers. Which first consider applications, then put money on hold, limit the options for withdrawing money, and so on. Here you cannot withdraw money only to terminals since this is physically impossible.

Comparison of trading on Forex and the BO market

For clarity, we summarize everything said above in a table.

All of the above does not make BO a bad tool. You can make money on them, but only on condition that the trader understands all the pitfalls of binary trading.

Grand Capital

It was Grand Capital that was the first to introduce BO into the well-known trading terminal MetaTrader 4. Now a web version is also available on the site, which after the latest update has become simpler, but at the same time less functional.

Grand Capital offers only 1 type of options, but with the possibility of early closure. The maximum expiration in the web version is 60 minutes. In MT4 you can set the closing time of a trade after several weeks.

After registering on the site, you can open a demo account, setting the balance yourself, or you can immediately move on to real trading and earn up to 86% from the transaction.

A special bonus “Break-Even Trading Day” is available for binary traders. You can select any unprofitable day and apply for a special bonus, the amount of which will be equal to the amount of loss on the specified day. Details on the Grand Capital website.

Also, this forex broker with binary options offers a unique service for its clients - LAMM accounts. This is a modified PAMM system in which the investor does not transfer money to the manager. Trades of the second one are automatically opened on the account of the first one.

Key Trading Principles

If we talk about them, we can note the absolute sameness. Now the forex club binary options in this case are virtually identical. Every user who wants to really make money must use their own trading system.

Only this option can make it possible to receive normal amounts. At the same time, a certain professional growth will also be carried out, which is important.

You need to understand a few basic nuances:

• It's important to forget about luck. Trading should be based on knowledge , not luck. Therefore, both markets are approximately the same in this regard. You won’t be able to get huge earnings instantly without much effort.

Anyone who wants to consistently receive a certain income must adhere to strict calculations. Stability is the main sign of a good trader. Only thanks to this quality will he be able to qualify for professional status.

• also advisable to study technical analysis . You need to become familiar with it at least at an initial level in order to understand how the graphs behave and what it all means. There are a large number of different nuances, terms and everything else that anyone who wants to make money needs to know.

The ability to correctly calculate the expected price direction in such cases turns out to be extremely valuable. Only after studying these points will Forex Club binary options bring real results.

To do this, you need to study the basics of a particular market, become more familiar with the offered instruments and other nuances.

What is Forex

Forex is a market in which transactions are made for the sale and purchase of currencies in order to make a profit due to fluctuations in the exchange rates of these currencies.

Here, profit or loss depends on how far the price will travel from the entry point.

Worth knowing: The difference between the real international foreign exchange market and its retail segment. The real interbank market is the sphere of activity of banks for the needs of states and corporate clients.

Retail Forex is nothing more than betting on currency quotes.

To trade, any market participant must choose a reliable broker.

I advise you to take your time and study reviews, familiarize yourself with spreads, commissions and terms of service. Try your hand at a demo account.

And only after this should you start trading on a real account.

Profitability

This factor is considered one of the most significant. It is unlikely that you, being unmercenary, would be interested in financial markets. Income is the true engine of any business!

Every user probably wants to understand where he can get a more solid level of profitability. If we consider relatively short time scales, then options have more attractive conditions.

For example, in the case of purchasing an option for one hundred dollars, the user has the opportunity to literally instantly, if the outcome is successful, make a good profit, the size of which varies depending on various factors. On average, this can be around sixty to eighty dollars. The shortest possible execution time is only one minute.

In Forex, in a similar period of time, in most situations, you may not even earn a dollar. This is due to the fact that in the case of a game with a fairly small deposit, a significant price movement will be required to at least make some money. It should move at least a hundred points.

Options are also considered a good option here because there is absolutely no difference in terms of distance traveled. It can be changed literally by a point so that the user, if he guesses the direction correctly, can receive money.

Forex works completely differently in this regard. Here the income is calculated according to different principles, where the main nuance is the number of points of price change. The more of them there are, the more significant income traders can count on.

Forex can be more profitable than options only on significant time scales and with really solid lots. If there have been significant changes in price over several months, for example by several hundred points, then you can get some good money.

But this option is suitable for those who are not used to getting excited and have significant skills and funds for investment. A beginner will probably choose options, because they are more attractive to him from almost any angle.

Credit opportunities

If we draw further parallels between Forex and such options, we can note leverage, which represents another risk factor for Forex users. Leverage is the opportunity to receive income from a large amount when there is only a small part of it.

For example, an amount of ten thousand dollars is being considered, but the user only has one hundred. The rest of the amount is provided by the broker as a kind of debt aimed at trading. This is done so that the user can count on receiving a more significant percentage of profitability.

But the loss of such an amount is, in principle, impossible in this case. You can lose no more than the amount that the user initially had. The transaction is closed automatically almost immediately after reaching the initial amount level.

The money provided by the broker is taken back by him. This is the MAIN DIFFERENCE between FOREX and BINARY OPTIONS , because there is nothing similar on the latter market. You can lose the amount that was spent on purchasing the option.

Larson&Holz

Only in 2021 the broker provided its clients with the opportunity to work with binary options. The company was a little late with the trend, but did everything efficiently.

Just like Grand Capital, Larson and Holtz provide 2 platforms for work: web version and MT4. Another advantage is high profitability. One trade can bring up to 99% profit.

But the dealer also has a minus. To work on the broker's platform, you need to make a deposit of $250 or more. In fact, it is not such a large amount for trading, but not all beginners are ready to risk it.

We reviewed the 4 most popular Forex dealers that provide access to binary options. Each company offers some special features. And most importantly, they are all reliable. Therefore, choose the dealer whose conditions suit you best and start earning money.

Nuances on underlying assets

In the case of Forex, such assets are exclusively currencies. This is due to the fact that it is a foreign exchange market. Options open up more extensive opportunities in this regard. They also allow you to trade:

• Commodities.
• Indices of famous exchanges.
• Shares of various large companies and much more.

ADVICE FOR BEGINNERS! For beginners, you can almost always find a good asset on the options market. If you will be trading currencies, then both options will do. But if the user wants to move away from currency pairs, it is better to turn to options.