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 and binary options trading, making our insight valuable in helping to understand the major differences between both trading products. In addition, we also believe it is valuable to to have a comparison of forex trading and binary options side by side so that investors can make an informed decision before diving in.
#1. Binary Options Are Not a Serious Financial Product, Nor a Legitimate Form of Investment
If you are looking to try out something new online that is 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 simple to navigate and boil down the concept of trading in order to make it as simple as it could possibly be. 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 many out there who have prior experience with binary options, fully understand these risks and have accepted them. This post is not directed at them as they are already familiar with the product. If you are new to trading, however, and wish to try out a serious investment, then 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 as it is no more than a gambling product. Unlike binary options trading, there are far more resources at your disposal when trading forex. Not only does forex trading have far more to offer when it comes to charting and analysis, you can also follow professional analysts and traders who do this for a living.
Furthermore, it’s worth noting that many investment banks, proprietary trading shops and hedge funds employ professional FX traders and risk managers. In short, knowledge of FX trading is a skill that one can build upon over time while binary options relies almost entirely on luck. There is no such thing as a professional binary options trader.
#3. Regulatory Concerns with Binary Options Trading
Regulation for binary options is very limited as many global jurisdictions have either banned binary options outright or classify it as a gambling product. Should you have a financial dispute with a binary options broker, it may be difficult, if not impossible to get a resolution. In short, you should assume that when you partner with a binary options broker, you are gambling.
Forex, on the other hand, is highly regulated across the globe. In fact, one of our core services at Atomiq Consulting is helping brokers obtain license and regulation around the globe. It’s worth emphasizing that a major advantage of trading forex vs binary options is that regulated forex brokerages offer a forum for raising disputes. For example, the United Kingdom’s FCA (Financial Conduct Authority) acts as a venue to lodge complaints about a forex broker which will then be investigated further. When trading binary options though, this luxury is not available since the product is scantly regulated and as pointed out, is illegal to operate in many countries.
#4. Service, Support and Resources
Opening an account with a forex brokerage will offer far more support both in terms of resources and customer service than a binary options broker. The majority of forex brokers offer free educational resources, guidance, and a far more personal approach to the market. In many cases new traders will receive access to even more resources upon opening an account. If this is your first time trading and you have many questions about how the market works, it’s better to open an account with a forex broker as you’ll be receive far better service and support.
Atomiq Consulting – Your Partner for Consultation Services in the Online Forex Trading Industry
We hope that today’s article was able to shed some light on a topic that many new traders are curious about. Due to our robust network of FX brokers and industry experience, we are happy to recommend several reputable forex brokers to partner with.
If you’d like to learn more about some of the forex brokers we suggest working with, discuss their terms in more detail or ask any other questions related to binary options or FX trading, don’t hesitate to contact us today!
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