FAQ

I think that foreign exchange margin trading and binary options trading are very similar. Are they the same type of trading?

The foreign exchange margin trading and binary options trading are different types of trading. From the point of view of market movements, they may look alike as a trader invests by predicting whether the exchange rate will go up or go down. However, there is a big difference in the risks associated with them. Even if large movements in prices happened, a trader who trade binary options will not make as much profits or losses as in foreign exchange margin trading.

In binary options trading, a trader forecasts whether the exchange rate will rise or fall at the time of expiration. If a correct predication was made, the trader can win back the initial investment plus the profits. On the other hand, if an incorrect predication was made, the trader will lose all the initial investment.

In the foreign exchange margin trading, it is possible that substantial losses would happen and that traders can lose the amount of money more than they can afford. This is not the case for binary options trading as the risks are pre-determined. It is thus considered as a simple type of investment for beginners to start with.

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