Making The Switch From Forex To Binary Options
Dennis BIG D

LEVEL 7 : QUALIFIED

REVIEWS 38 | REPLIES 23

#3056

dennis

January 8, 2016 at 12:24 pm

So this has been a highly debated topic (Spot Forex vs Binary Options) in the trading industry so I decided to give some background on Spot Forex, thus showing that it is not that different in the sense to where Binary Options is now, and where it is supposedly heading to. You might be surprised how similar these two completely different forms of trading are. Let’s have a quick look at the background around the Spot Forex market.

Spot Forex has been around since the 1970s after a 3-decade government restriction on foreign exchange transactions. Looking at this information, we can see that Forex and Binary Options are not that different after all in regards to being accepted as a legitimate form of trading. Binary Options is still in this process due to US CFTC  regulations. While other regulated bodies have started to give out regulations, we are still far away from seeing the United States giving in. Does this mean the binary industry is not a valid opportunity to bank some profits? A lot of Forex traders are making the switch to capitalize on this form of trading.

Some Interesting Facts About the Foreign Exchange Market

The average daily turnover is in excess of US$4 trillion! Crazy Right? Here is the break-down From Wikipedia.

  • $1.490 trillion in spot transactions
  • $475 billion in outright forwards
  • $1.765 trillion in foreign exchange swaps
  • $43 billion currency swaps
  • $207 billion in options and other products

I am not going to go into details as to how and what exactly the Spot Forex market is. A quick Google search will do the trick.

Why Are People Making The Switch

The short answer is – Opportunity! Some traders realized that they can capitalize on this form of trading in a similar way to how they have been trading FX. Since binary options allow you to trade most if not all currency pairs this is nothing new to them. It comes down to still being in your comfort zone. Although the way it works is different, the principle stays the same. Where will the market price go – Period! This is not something the first binary options brokers thought out or did by accident. It was purposely designed this way.

Ever thought about the above mentioned?

This is not a formal article, more of an eye opener to those that despise binary options. Is Spot Forex and Binary Options really that much different? I would love to hear your feedback, comments or arguments regarding this topic! If this is something that becomes a popular subject I would love to go into more detail.

Twila Fennell

LEVEL 2 : NOVICE

REVIEWS 8 | REPLIES 5

#3060

caspian

January 8, 2016 at 1:00 pm

Hi Dennis 😉

This is indeed a very interesting topic and debate. Something you see people argue about all over the internet on forums. Everybody has their own opinion and insight, which is fair I guess. What ticks me off the most is those that have not even tried binary options nor done any research regarding it. How can you give a blind opinion? I have seen people get banned on forums around these types of topics, no jokes. Some have road rage on forums if you get what I mean.

Anyway… getting to my 2cents. I have traded both FX and binary options FX. So basically currency pairs on both forms of trading. The main concern and debate is always the trading against the broker when it comes to binary. Well, what most people do not even know is that their Forex broker is a market maker. Which means it is no different than binary options. The FX broker takes the other side of the trade. Unless you trading with an ECN or your broker offers straight through processing you are in the same boat. They have been known to manipulate price, delay orders etc.

How is this any different than Binary Options? I rest my case folks.

Steve White

LEVEL 2 : NOVICE

REVIEWS 7 | REPLIES 6

#3061

Stevie

January 8, 2016 at 4:00 pm

Snap! One of my favorite topics. Who does not love a good debate? I love to read these types of posts and replies but usually stay on the sideline. But thought I’d give my outlook on this never ending topic 😉

I also have and still do trade Spot FX as well as Binaries. I do not prefer one over the other. I argue that both have their time and place depending on the market conditions. Both can be profitable as well as cause you to lose your funds. One is not riskier than the other due to the last mentioned possibility. No one can argue that FACT!

Think I have said enough!

Jerrod Goodpasture

LEVEL 2 : NOVICE

REVIEWS 7 | REPLIES 5

#3062

jbom

January 9, 2016 at 8:09 am

Hey guys – I have not traded normal FX at all, so I cannot give my personal opinion on that. I started with binary options and am still trading it till this very day. I love the way of trading! I might venture into Spot FX as I have never tried it. Looks to be more complicated that binaries though. Time to go do some research!

Cheers

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