Forex binary trading has become a popular investment option among traders as it offers uncomplicated, safe, and simple way to invest money even in the volatile market conditions. Binary options, also known as fixed and digital return options, is a smart and direct way to approach the financial market, which stays unpredictable most of the times. As per this trading, an investor only has to predict whether the value of currency value will end below the strike price or above in a selected period.
Forex binary option has only two outcomes .i.e. in the money and out of the money that help in determining the profit and loss. If Forex binary options finishes in the money, which means the value has surpassed the expected price level, it is a profit. If it finishes out of the money, which means the price did not cross the expected price level, the trader has to incur the loss.
There are few similarities between spot forex trading and forex binary options trading. Both the trading options facilitate traders to invest online at anytime from anywhere. To perform both the trading, a trader requires prior knowledge about the market conditions and move as without it is risky in both the trading platforms. The trader active on traditional forex trading can easy use binary trading platform as it requires only market knowledge to invest money in binary trading.
Comparison between Spot Forex and Forex Binary Options Trading
The risk is limited and fixed in the options trading platform in comparison to spot forex trading. However, traditional forex trading entails alternative of earning high potential profits, which is limited in forex binary trading. In spite of that the traditional trading is quite far away from benefits such as refunds and opportunity to earn fixed profit in a short span of time. In forex binary trading, a trader does not have to watch the movement of the asset every now and then, like in spot traditional trading.
In spot trading, a trader has to pick whether or not the currency pair will go up or down against each other. With the binary option trading, a trader can select just need to predict the direction of assets within the given period. Forex binary options trading allows trader to earn huge returns on their investment in short span of time, which is not possible to gain in sport trading option.