It can’t be denied that online trading has made its fair share of millionaires, but the question on the minds of many new traders is whether to go traditional and trade contracts, or take the easy route and go with Binary. When asked which is better, our standard reply is “It depends!”
This article will help you make an informed decision when choosing the right option for you. Let’s just briefly go over the aspects that are the same before we highlight the differences.
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Since both Binary and Traditional are trading on the same markets, it boils down to which broker you are with. If you choose one of the well-established brokers that are consistently offering traders top services, you will get a regulated company with segregated and insured fund management. You’ll get 24/5 support, a professional software suite, and professional managers to guide and assist. So what is different?
Traditional trading is all about buying contracts and selling them back later. The iPhone example shows how profits and losses are generated, but with trading you are estimating a fixed future price. The amount of accuracy decides just how much you profit. If you buy 100 shares in the software company Banana Inc. for $100 and those same shares multiply in value by one thousand, you will gain $100,000 (minus spread / commission). It happens practically every day for thousands of traders, but there is a dark side too!
Because of something called leverage, that door can swing the other way and hit you right in the face. Big rewards for big risks, unless you keep things small and don’t let impatience or your emotions get the better of you.
Binary Options is a lot easier to figure out, requires much less research, and has an establish win /loss maximum from the start. The aim with Binary Options is to simply decide if the asset you are interested in will go up in price or down… that’s all you have to do! A $100 investment will either double (minus spread of commission) or lose. There are no hidden surprises and you don’t need to decide how far it will go up or down. If the asset is as you predicted at the allotted time, you profit.
This might sound like you’ll have less opportunities to profit, but in fact time slots can be as little as 30 seconds. It’s fast, exciting, offers a higher entertainment level, in most cases same day result, and no unforeseeable risk of losing everything. The negative of Binary Options comes when you accurately predict the rapid rise of Banana Inc stock. With binary your $100 investment brings a profit of $100 (minus commissions), whereas a contract for difference could pay much much more.
If you want to know exactly the risks and have a fast and entertaining experience without the need for research, Binary Options is just right for you. Thanks to PayPal, credit cards, and several other eWallet options, it is easier than ever to get started with Binary Options. If you prefer to spend a little time researching an asset before investing over a longer period for a chance at bigger wins, then you are better suited to contracts and should sign up for Traditional Trading.