Binary Options vs. Forex – 4 Reasons Trading Forex is the Better Choice
Those new to trading forex have most likely heard of binary options before, prompting a common question: what is the main difference between forex and binary options trading ? Our team at Atomiq Consulting have watched the tremendous growth of both online forex as well as binary options trading over the years, making our insight valuable in helping newcomers understand the major differences between both products.
#1. Binary Options Are Not a Serious Financial Product, Nor a Legitimate Form of Investment
If you are looking to try out something new, something similar to what you’d find at an online casino, then binary options may be of interest to you. Similar to online roulette or blackjack, binary options platforms are easy to navigate, boiling down the concept of trading to make it as easy to understand as possible. Be warned, though, that very few investors make money trading binary options. In fact, we think even calling it an investment would be giving the product too much credit as in our view it is no different than any other form of online gambling like slots, video poker, or roulette.
There are plenty of speculators with prior experience trading binary options who fully understand these risks and have accepted them. This post isn’t directed at them, rather towards those new to all forms of online trading. Therefore, if you happen to be new to trading and wish to try out a serious investment, in our opinion, it is better to skip binary options and focus instead on trading forex.
#2. Forex Trading is a Better Choice for Serious Investors
If you wish to approach forex trading from the standpoint of an investor, then we advise against trading binary options. Because binary options are nothing more than a gambling product, it’s simply not suitable for any serious investor. Not only does forex trading have much more to offer when it comes to charting and analysis, those new to the FX market have the additional benefit of being able to follow a variety of professional analysts and investors who trade FX for a living.
It’s also worth noting that many investment banks, proprietary trading shops and hedge funds employ professional FX traders and risk managers. Knowledge of FX trading is a skill that can be built upon over time while successful binary options trading relies almost entirely upon luck. As a final thought, consider the fact that there is no such thing as a professional binary options trader.
#3. Regulatory Concerns with Binary Options Trading
There are only a handful of regions in the world that still regulate binary options. In fact, many global jurisdictions have either banned binary options trading outright or classify it as a gambling product. If you were to raise a financial dispute with a binary options broker, it may be difficult, if not impossible to receive a formal resolution let alone a return of your investment. One should assume that when you partner with a binary options broker, you are doing nothing more than gambling with your money.
Unlike binary options, forex & CFD trading is highly regulated across the globe. In fact, one of our core services at Atomiq Consulting is helping forex brokers obtain license and regulation in a variety of global jurisdictions. It’s worth emphasizing that a forum for raising account and trading disputes is a major advantage regulated forex brokers can offer to their clients that binary options firms simply cannot compete with.
For example, the United Kingdom’s FCA (Financial Conduct Authority) serves as a venue to lodge complaints against any broker regulated in the United Kingdom. In practical terms this means that if you have a dispute with a forex broker licensed in the UK, the FCA remains at your disposal to both hear your complaint and also assist you in coming to a resolution. This luxury is not available when trading binary options because the product is scantly regulated and as we pointed out, is illegal to operate in many countries.
#4. Service, Support and Resources
When you open an account with a forex brokerage, you’ll receive far more support, both in terms of resources and customer service, than you would at a binary options broker. The majority of forex brokers offer free educational resources, guidance, and a personal approach to the market that binary options firms simply cannot compete with.
In many cases new traders will receive access to even more resources upon opening a live trading account. For those who are new to trading and have many questions about how the market works, we strongly recommend opening an account with a forex broker as you’ll be receive far better service and support than you ever would trading binary options.
Atomiq Consulting – Your Partner for Consultation Services in the Online Forex Trading Industry
We hope today’s article was able to shed light on a topic that many new traders are curious about. Due to our robust network of FX brokers and overall industry experience, we are happy to recommend several forex brokers that have both a solid reputation and positive track record in the online FX trading industry.
If you wish to partner with a reputable forex broker, discuss trading conditions in further detail, or simply ask any other questions related to binary options or FX trading, don’t hesitate to contact us today!
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