Binary options attract more and more traders from all over the world, even though they are a relatively new concept. The secret of their popularity is probably in the fact that this trading method is simple, easy to learn, accessible to everyone and very versatile.
One of the unique features of binary options is that they offer several markets to trade on, which you cannot find with any other trading method. Forex is one of the markets you can follow if you opt for binary trading, and in this article we will tell you something more about this type of options.
How the Forex market works
In the Forex (Foreign Exchange) market, you trade one currency against the other. It is over-the-counter (OTC) market, where millions of traders make money every day. The changes and fluctuations in this market are fast-paced, so it is a very dynamic trading market.
There are several main dealer centers in the world which operate in London, New York, Tokyo and Singapore. Because the trading centers are on different continents, their Forex markets are open at different times, depending on the time zone. As a binary or Forex trader, this means that you have an opportunity to trade Forex around the clock. The market is open five days a week, and it is closed over the weekend.
Differences between binary and Forex trading
As a binary trader, you can trade Forex on the platform of your broker. In both cases, you need to predict the prices of two currencies in terms of each other. If you want to end the trade successfully, you need to make the correct prediction. However, these two trading types differ, and there is a reason why they are executed on different markets and platforms.
Forex traders predict the price of currencies, but they buy and sell the currencies directly and that is how they make earnings. It is not easy to calculate the amount of earnings or the potential loss, because it is affected by the price of the currencies at a given moment.
Binary traders should also predict the price of the currencies. Still, this is a much simpler process. You should only predict whether the price of one currency will rise or fall in comparison to the other. When you buy the option, it is easy to calculate the potential earnings or loss, because they are the same regardless of the actual price of the currencies. Binary options also allow you to use automated trading software, like Quantum Code. You can set them to trade Forex, and they will do the trading on your behalf.
Who should trade Forex binary options
Forex market is fast-changing, with fluctuations in prices that happen in seconds. It is not suitable for options with long expiry periods, because it is difficult to predict the final price when the changes are so common. On the other hand, Forex is ideal for binary traders who trade on short expiry periods, such as 60-second options. When the changes happen so often and so fats, it is ideal for such binary options and it can bring very high earnings and many trades during a day. Start for free now at Top 10 Binary Demo.