This post will analyse the advantages of Trading Binary Options over Forex Trading There are plenty of advantages for Trading Binary Options even over Forex Trading – although they are based on the same market principles. Here are some of the benefits and advantages of trading Binary Options.
Trade Binary Options – Simplicity in Executing Trades
Binary Options have taken the market by storm because of their simplicity to execute. The Binary Options Brokers provide easy to use platforms. The day trader has only got a few choices to make
- Choose the Trading Asset eg., currency pairs, Indices, Stocks and Top Commodities
- Choose the Time Frame within which to trade. Generally speaking, good brokers offer from 60 seconds trades to 5 minute trades, called Turbo Trades. Then offer classic trades which range from 10 minute expiry all the way to end of day. The trader has to choose from any of the expiries available.
- Choose the direction of where the day trader thinks that the price will go. Generally this will be UP/DOWN or BUY/SELL
- Execute the trade for the value chosen. This again may range from $1 all the way to $25,000 for any single trade, again depending on the Broker.
Watch this video why trade binary options or continue reading.
Trade Binary Options with Calculated Risk
The day trader can exercise Risk Management by knowing exactly the potential of his loss and maximum earnings BEFORE setting up the trade. The value of the trade is the maximum amount of loss that can be experienced by the trader if the trade ends OTM or Out of The Money. Unlike Forex Trading, there is no leveraging and therefore a trader is not exposed to potential losses greater than his risk value. Likewise, the potential profit if the trade ends ITM or In The Money is known at the outset by the payout given by the Broker.
Trade Binary Options with No Commission or Middleman
The day trader does not have to pay any clearing fees, government fees or brokerage fees. The Broker makes his profit from the difference between the value of the trade and the pay-out by netting out against other traders who have lost a trade.
Trade Binary Options on a market that runs 24 hours a day for 5 days a week.
Anywhere you may be in the whole wide world, you do not need to wait for a specific time to trade. The Stock exchange in Australia is the first to open on Monday morning (which is still Sunday afternoon in the USA). To know what your Time Zone is vis-à-vis other countries you may check this out HERE. The binary options and forex trading market never sleeps. It only rests Saturday and Sunday. So for day traders who wish to trade on a part-time basis, this is one of the easiest and most legitimate forms of making money online.
The Trading Market cannot be manipulated
The Forex and asset market is such a huge market that no one entity can manipulate it. No central Banks, not even politicians have the ability to move the market. The market moves only on the Market Sentiment. Trading can be enhanced or avoided during volatile periods whenever there is an Economic Update.
Trade Binary Options because of High Liquidity
Because the binary market is so enormous, it is also extremely liquid. A trader can execute a trade at the touch of a button. Having said this, choosing a legitimate broker and ideally a regulated one, is quintessential for pay-outs and withdrawals.
Trade Binary Options with Low Deposits to Entry
The minimum deposit required to set you off as a Binary Options trader can be as low as $50 dollars, but is generally determined by the individual broker and an average the minimum deposit required to open a new account would be in the tune of $250.
Trade Binary Options on a Free Demo Accounts
Learning trading can be painless when opting to trade on a DEMO ACCOUNT. Most binary brokers will open a separate demo account once you have funded your account. However some brokers such as IQ OPTIONS give you the possibility of opening a DEMO ACCOUNT without needing to fund an account.
Practice to build your skills with demo accounts and free charting systems. Net Dania offers excellent charting services for free. Forex Factory also gives you news and updates on their Economic Calendar.
Trade Binary Options using Trading Tools
The Binary Options Industry like the Forex Industry is aided with tools which arrive in a variety of forms such as signal software and auto traders. These tools will give you signals and may even auto-trade on your behalf with varying success. Choosing a legitimate signal software system or automated trading is crucial to your success. The market is inundated with scam software systems, and we recommend that you due your due diligence and always check out our Recommended Signal software systems as well as our Hall of Horrors in the Blacklist page.
Now that you know all the advantages of how simple it is to trade Binary Options, you do not need to understand the heavy duty settings of Forex Trading.