Online trading has gained a massive population in recent years and continues to attract more and more individuals each day. Two of the most popular forms of trading are known to be forex and binary options. Where both of them offer a significant amount of profit to their users, it’s not entirely the same. Now the purpose of this article is to figure out which of the two proves to be easier for beginners.
Apart from the most suitable forms of trading, you need to agree upon a platform you would use to conduct your trades. Some of the best beginner-friendly trading platforms are TD Ameritrade, Fidelity, E-Trade, Merrill Edge, and Charles Schwab. Each of them provides a user-friendly interface, making it easier for the trader to navigate and learn.
Pros of Binary Options
Binary options trading involves investing in assets, stocks, currencies, and commodities, and predicting whether their value will increase or decrease in a predetermined period.
Following is the list of pros that binary options offer:
Though there’s a substantial risk associated with binary options trading, you still have the capability of minimizing it by controlling the amount you decide to risk. This helps you remain financially secure even after losing a few trades.
Easy And Simple
When compared to the traditional style of trading, binary options are comparatively uncomplicated and easy to navigate. A fraction of beginners often find it particularly enjoyable and even profitable. All you require is to predict the price movement of the underlying asset.
Effective Risk Management
Managing risk is utterly easy when you are trading with binary options. You can easily manage, track, and alter the risks induced by Binary according to your preferences. Further, a good number of brokers allow traders to trade with a low initial investment, thus minimizing risks.
Pros of Forex Trading
Forex trading is known to be the universal platform for exchanging currencies, you can read more here about it. By far, it is reputed to have 5 trillion USD traded daily in forex. Traders trade currencies in pairs and compare the value differentials between the two, like the USD and the Euro.
Forex trading involves high variability. Traders have to predict not only the direction of the currency’s move but also how high or low its value has to go.
Following is a list of pros that forex trading has to offer:
A Large Global Market
The size and scale the forex market is expanded over are in itself enough to benefit traders to a good extent. It is the world’s largest financial market, ranging over $4 trillion USD on average each day. It is active throughout the day, returning huge amounts of profits, adding to the element of it being global.
Ideal for Beginners
Forex trading provides great accessibility to its users. Entering the forex market is way easier compared to all the other tradable variants. It also does not require a hefty capital investment. However, you need to remember that you need considerable knowledge and skill to trade well when forex is considered.
Benefit from Leverage
The feature offering the availability of leverage is one of the best elements of forex trading. This is because it allows traders to make their way to a higher position with minimal investment. However, keep in mind that leverage can increase the risk potential.
On an Ending Note
When comparing forex trading with binary options, it is important to note that binary options offer fixed risks and fixed rewards. This makes it more suitable for risk-averse traders. Whereas, forex may offer higher returns, it remains much more complex and involves greater risks. Hence, binary options are a more suitable choice for beginners.