The popularity and growth of Forex trading are no secret from anyone. Thousand of traders are stepping into Forex trading. It is primarily known for its higher profit rates and opportunities. However, Forex trading is not the only option that new traders consider. Binary options are also a good option for trading.
This article will compare these two trading platforms based on their profitability.
The foreign currency exchange forex market liquidity is a very large trading platform. Many Forex traders use this platform because it is fast and offers a lot of profit. Traders must pick a currency pair and estimate their relative pricing. The prices are affected by several factors, such as the global economy. Forex is very easy to access for traders.
Binary options are a straightforward trading platform. Traders set the investment amounts and investment period beforehand. This ensures that the risk factor is decreased. Traders invest in the currency and commodity of their choice. It is less risky and requires less study and research.
Let us look at how the two trading platforms compare in terms of profitability.
1. Potential profit
Potential profitability is the ability or maximum amount of profit that a platform can offer. It does not mean that every trader will get this amount of profit. However, the platform will reward the person with the right set of decisions.
Forex trading has very high-profit potential. Traders can earn many folds profit as compared to their investment. There are stories all over the internet where traders who started from very small amounts earned millions of dollars. Hence, Forex is probably the best trading platform in terms of profitability.
Binary options have a good profitability rate. However, it is lower than Forex trading. The trader can set the amount of profit they wish to achieve before setting an investment. However, the maximum amount of profit is set at 95%.
2. Risk associated with profit
We can not discuss the profitability of a platform by ignoring the risk factors.
Forex is an extremely risky platform for traders. Forex platform is very volatile and liquidated. The prices can go up and down in a matter of seconds. Small factors can account for huge changes in the market. The trader has to be vigilant, or else he/she will pay a high price.
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The trader can set out the investment, time interval, and loss on a binary options platform before starting a trade. Hence, the loss margin is significantly less, and the trader has more control over it.
3. Time and effort required for profit
Every good thing requires a struggle.
Traders have to acquire a lot of information and knowledge before investing in the Forex market. If the trader gains substantial information and understanding, he/she can excel and make a lot of profit on the Forex exchange.
Binary options require less research and understanding of the platform to earn profit.
Forex trading requires more knowledge and effort than binary trading. However, it is more profitable and riskier. Please follow the link if you want to read our trade nation review.