Please note that binary options are not the same as forex.
Binary options, basically have only two outcomes. That’s where the term ‘binary options’ originated. The trader makes a profit or a loss on the entire initial deposit, depending on which one happened. If the prediction given is correct, one gets back the initial funds plus the profit. Meanwhile, Forex does not set a limit on how much money a person can earn or lose in completing a trading order. However, there are instruments like quotex corretora to influence this uncertainty. One such mechanism is called stop-loss which prevents the trader from suffering losses beyond a certain amount. That is, trades are closed automatically once this specified threshold is reached.
Binary options as a financial product have an expiration date, while forex does not. But in both cases, we speculate whether a particular asset will go down or up. Forex provides its traders with the implementation of individual profit targets in combination with the aforementioned stop-loss orders. Neither is available for binary options. Lastly, traders must win most of the trade bets to have a long-term track record of being successful and profitable.
Some general similarities between Forex and binary options also exist. Both started with little initial capital. In addition, clients can trade both online, an attribute that is a relatively recent ‘democratization’ of most financial markets that used to be much more limited. The tradable assets themselves are also the common ground. Many, if not all, financial products traded through binary options are also available on the Foreign Exchange market, such as currencies or precious metals.
The Forex market is defined by more significant fluctuations than binary options because it can be approximated indefinitely by expiration dates or fixed profits. This aspect represents a wider range of benefits as well as risks. It should be emphasized, that binary options are not Forex, and Forex is not binary options. This means that forex brokers have nothing to do with binary options due to a very different approach to providing financial services.
