The age of trading Binaries is coming to a close as more and more financial regulators are starting to ban the activity. Although there are some cases where companies offer actual good opportunities to trade binaries, the bulk of the market eventually turns out to be either a scam or something unprofitable. If you are a binary trader and are looking for new opportunities then FX is your best bet. Let’s look at what’s best to do when you are switching.
Learn order types
When starting out in Forex you will notice that contrary to the single trading style with Binaries, it has several orders you can make, according to the type of trade you are planning. In most cases, you’ll find guides on FX broker websites and their education pages. There are a lot of orders, but let’s cover the most important ones.
Market Order
This is the order that allows you to buy at the best available price. For example, if the bid price on EUR/USD is 1.2048, and the ask is 1.2050, you’ll be able to buy it at the 1.2050 price point. No machinations whatsoever. This is probably the most popular order type as it guarantees the absence of any unnecessary costs.
Stop Loss
A stop-loss is pretty much self-explanatory. For example let’s say that you just made a trade on the EUR/USD at a price of 1.2050, however, your predictions for the future were wrong and the price is now falling down to 1.2040. Thankfully, before making the trade, you set a stop-loss order on the 1.2045 point. Meaning that the moment the price hits that mark, your position will be closed and you will avoid any further losses. Yes, it’s never good to lose on a trade, but it’s best to limit your losses as much as possible. Besides the stop-loss order helps you not be attached to your screen 24/7 and helps you relax a lot more, knowing that even if things go wrong, you won’t lose much.
Take Profit
The take-profit order is also self-explanatory. It guarantees that if a price reaches a certain point, the position will be closed and you will immediately be able to take the profits. But why limit your profits? Isn’t trading about making as much money as possible? Well, yes but look at it this way. You set the take-profit order at 1.2060, knowing full well that the price will not surpass it. When the price hits that mark, your order is stopped and you make some money, but as soon as it hits the 1.2060 the price starts falling immediately. As you can see a human wouldn’t be able to have such quick reflexes and a take-profit order does. It basically helps you to ensure you’re in the green.
Study the brokers
Binary options brokers usually provide you with the same business model and features. With Forex brokers it’s completely different as their services vary drastically. You see finding a good FX broker that won’t scam you isn’t hard, but finding a Binary broker with the same features may be challenging. Therefore the binaries would copy the most trusted brokers to at least seem familiar. While FX brokers have a plethora of possibilities. Things that you need to pay attention to when studying an FX broker:
- Regulation
- Spreads
- Leverage
- Withdrawals & Deposits
- Minimum Deposits
- Bonuses
- Customer Support
- Provided analysis tools
- Software
And etc. There are a lot of things to pay attention to. These are the basics that you need to know. As to why you need to switch from Binary Options trading is up to you. But in my humble opinion, it’s the best decision you’ll ever make, both for your mind and wallet.
Conclusion
As you can see there aren’t too many details when it comes to learning FX trading. But remember that it is way more complicated than Binaries. When comparing the two, FX may seem like a jungle of information, but remember that it is safer, more effective and most certainly more rewarding. Start with the two I listed above and the next step will open itself up for sure.