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 over the years, making our insight valuable in helping to 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 simple 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, 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. 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. Should you have 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 brokers obtain license and regulation in a variety of global jurisdictions. It’s worth emphasizing that a major advantage of forex trading over binary options is that regulated forex brokerages offer a forum for raising disputes.
For example, the United Kingdom’s FCA (Financial Conduct Authority) serves as a venue to lodge complaints. This means that if you have a dispute with a forex broker regulated in the UK, the FCA is at your service 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. If this is your first time trading and you have many questions about how the market works, we 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 some light on a topic that many new traders are curious about. Due to our robust network of FX brokers and experience in the forex trading industry, we are happy to recommend several reputable forex brokers that have a solid reputation and positive track record.
If you wish to partner with a reputable forex broker, 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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