If you are into trading of stocks and have prior experience then you will certainly find this topic interesting and informative. Even otherwise, if you are new to forex trading it makes sense for you to spend some time going through this article. There is something known as binary options trading and there are obviously some obvious and advantages of such forms of trading when compared to other forms of trading. Hence we will try and have a look at a few such advantages so that even experienced and new traders will be able to understand this form of trading from the right perspective. We are sure it will help them to trade better after having a reasonably good idea about this form of trading when compared to conventional forex trading.
What Exactly Is Binary Trading
When we talk about binary trading we are referring to a trading method where there is complete payoff or nothing. In other words, it is about winning full amount or not winning anything at all. While this does look lucrative, it does come with pitfalls because traders could end up losing everything and their entire investment could be wiped out in one trading session. However, if you do some research and then move forward there are obviously some known and proven advantages. It certainly has helped dozens of forex traders to make big money provided they move in with the right knowledge of binary trading in particular and forex trading in general. Without wasting much time we will look at a few advantages which has enabled prekyba realiu laiku to become and as popular as they are now.
Potential for High Return On Investment
Since the risk involved is quite high as far as binary options are concerned, you also can expect a much better returns. In fact if you look at historical data, there are many reasons to believe that the return on investment always ranges between 60 to 90% which is excellent to say the least. This compares very favorably to a conventional forex trader who could aspire for a return which could be around 10%. Hence, the more you risk the better your returns could be.
Risk Is Fixed
You know upfront as to the risk you could be exposing your trading to. There is nothing hidden or unknown and therefore you will know how much profit you will make or how much loss you will incur. There is nothing such as leverage costing because you will at best lose only what you might decide to trade on a particular currency or session. This is not like conventional forex trading and there have been many instances where a single pip could lead to 50 times more profit for a particular session. Hence, this is a feature which one needs to always bear in mind.
You Could Get Something Even In A Losing Situation
Though binary forex tradition options come with higher payout, the risk which it carries is certainly much higher when compared to other assets and instruments. Therefore there are some steps and utilities available which could reduce this risk and make such form of trading appealing to the traders. For example, if you have chosen an offer and expected to make 100% return and if it did not happen, you may not end up losing everything. You could still end up getting back around 5 to 15% of the investment back. However, this would depend on the kind of brokers you choose and good forex brokers ensure that you do get back some part of your investment even when the day is not good and not going in your favor.
Ease Of Trading
Another reason why it makes sense to go in for binary option is that it is considered to be user friendly, investor friendly and can be done by those who do not have the right experience and expertise. It comes with demo account and various other help tools. These include videos which are full of useful information and many brokers also offer live chat and other facilities. Since you will have to make a decision between win and loss, the trading becomes that much simpler. There are no complications like stop losses, risks associated with magnitude of price movements, leveraging knowledge and so on which is associated with conventional forex trading.
Turnover Rate Is Fast
Another good feature about binary options is that it comes with a very fast turnover rate. Therefore you have a quick payout option. Though this could be different in different form of assets, as far as forex is concerned, you can really see the benefits of turnover happening right in front of you. Within a few minutes the whole thing could be over in the form of yes or no and you could get into the next binary trading session if you have the risk, wherewithal and funds to do it. In fact it would be pertinent to mention here that most of the trade using the binary route takes around 15 to 30 minutes and there are also 60 second options. However, these 60 second options are more akin to gambling and are best avoided.
Free Trading Account
Since forex trading is getting extremely competitive, most brokers are ready to offer free account and therefore you need not spend money on opening new account. This makes the job of opening new forex account through the binary route quite easy and simple to say the least. The money which you will put in your trading will go directly to the trading sessions and there will not be any brokerage involved for opening the account. However, if you wish to have a demo account, many brokers may insist on a minimum amount. You can get into trading with as little as $100 and you will be given the facility of using the demo account.
Hence if you look around, do some research and then go in for binary trading in forex, you could be benefitted in more ways than one. However, there are some inherent risks which you must always bear in mind.