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Comparison between Forex, Binary Options and Penny Stocks Trading

October 20, 2015 in Miscellaneous

Whether you want to make an investment that will boost your savings account or you want to build a diversified portfolio and a career in trading, investing in foreign exchange market, binary options or penny stocks may seem very appealing. In this article I am going to analyze and compare these three types of equities and determine all advantages and disadvantages they come with.


Forex is the largest and the most liquid market in the world and its trading value is more than $1,9 trillion per day. Before digital age only central banks, corporations and other large financial institutions were laying investments here, and with the introduction of internet and online brokerage accounts, everybody has a chance to buy and sell world currencies.

This market is known to be much less volatile than binary options, and especially penny stocks. Most currency values change very slow, usually for less than 1% a day. This makes Forex much less dynamic, and the only way to earn meaningful profits is by having enormously big leverage (even 250:1 in some cases). High leverages became an industry standard on Forex and although exchanging amounts that high sounds risky, extreme liquidity of the market makes these large investments the only profitable option. Forex market is also know for being very objective, because its size doesn’t allow large players or manipulators to change prices at their will.

One of the main market characteristic that makes it both popular and risky are the low margin requirements that online brokerage firms provide. With putting only $1,000 up front, trader can control 100 or 200 times bigger amounts, with borrowing the remainder from the broker.

Although being very liquid, there are still lots of factors that can influence currency supply and demand. Some of these are:

  • Interest rates
  • Economic performance
  • Political situation, etc.

Binary Options

Binary options are very simple to trade and they are similar to red-black system in roulette, just the outcome of the trade is not only defined by luck, but by many other parameters that determine stock prices and different market outcomes. Comparing to investments in Forex or penny stock market, binary options certainly seem like placing a bet. The difference is that bids and asks are not determined by the “casino”, but by traders themselves and they are made upon probability of the proposition. The simplicity of the trading process for these assets, made them widely popular and there are many companies like NEDEX and Chicago Board Options Exchange that are authorized to sell binary options to US citizens.

One of the main benefits of this kind of investment is that all risks are capped and it is not possible to loose more than the cost of the trade. Unlike on Forex or penny stock market where pairs are barely moving, binary options come with the known payout which depending on the option can have really high reward to risk ratio. Capped risk, can also be viewed as a disadvantage because it caps traders gain at $99, even with the most favorable pair. Another good thing about these equities is that they are accessible even to beginner traders with very limited funds.

Penny Stocks

Every successful company of today started as a micro-cap stock. These stocks are traded on pink sheets or over-the-counter bulletin boards. They are known as much more volatile than the blue chip stocks and there are four major factors that determine this:


  • Lack of information- penny stock traders need to find alternative ways to collect information about the company.
  • No Minimum Standardsmicro-cap companies whose stocks are sold on pink sheets, don’t need to fulfill SEC minimum standards, although lately OTCBB requires companies to file their documents to SEC in a timely manner.
  • Lack of History- companies are usually newly found and have no track record.
  • Liquidity- penny stocks generally have low liquidity, which enables certain traders to pump up the prices of stocks they own.


Accept having very low price per share penny stocks also have very quick moving intervals, much quicker than blue chip stocks as well as binary options or Forex. Their affordable price enables investors to buy as many as they wish, and make more diversified portfolio. Last but not least, certain stocks often move from micro-cap to mid-cap market, which multiplies its value several times, and provides great returns that can’t be acquired on Forex or binary options market.

Bottom Line

All three of these investment opportunities are great for beginners. Penny stocks are definitely the most volatile out of all three, but they also offer the highest possible returns. For traders who want always to know their score, binary options with capped gains and losses, are definitely the best bet, while Forex is great investing environment for traders that prefer high leverage combined with relatively stable market. Investors can also try their lack on some other markets and invest their funds in: bonds, trusts, real estate, blue chip stocks etc.

This is part 2 & part 3 for a series of short videos describing the journey in going from an amateur to pro trader.

December 29, 2013 in Miscellaneous

In part 2 of this series I describe how forex robots & systems sold over the internet are time-bombs. Never believe any performance claims unless they are independently verified. Ignore fantasy claims of huge profits month after month.  I give examples of some scammers I have bumped into along the way.

In part 3 I talk about the key to making money is to understand trader effects and how to exploit them.  At the end of the video there is an interesting perspective on the world we live in.

Connecticut Shooting – Doesn’t The U.S. Need to Revisit The Gun Laws?

December 15, 2012 in Miscellaneous

 Newtown, Connecticut shooting killing 28 innocents[Opinion] Freedom comes with a price. But then which freedom at what price is the question. The question can be as simple and straightforward as we wish to make it. But then the simplest things in life can be very easily made complicated enough to need decades of debates, throwing of the governments and even wars to leave their scars for centuries to come.

A 20 year old youth Adam Lanza, enters the class room of Sandy Hook Elementary School in Newtown, Connecticut, with four loaded guns and safe behind a bulletproof vest (according to media reports), and kills the teacher who happened to be his mother and then innocent children and some adults.

Total 20 children of the age 5 to 10 and 8 adults, including the gun man were left dead. The question, which was left unanswered again, is whether it was Adam Lanza who is to be blamed for this tragic lives of innocents or this is the easy availability of guns which does not only kills the innocents but innocence itself?

Our heart goes out to the families for this loss which can never be recovered. Our heart also goes to those innocent lives who were yet to bloom. And our hear goes to the children of this world where they die of hunger or sickness if they are from poor nations but also who, despite of belonging to the richest nation of the world, can’t feel safe.

[Photo Courtesy: Reuters]

Future Of Internet Talks Begin – Make Your Voice Heard

December 3, 2012 in Miscellaneous

Email From Google. If you support free internet, you may please raise your voice:







A closed-door meeting of the world’s governments is starting today. The future of the internet is on the agenda. Some governments want to use this meeting of the International Telecommunication Union to increase censorship and regulate the Internet.

I am concerned, and I am not alone. More than 1,000 organizations from 163 countries have raised concerns about this upcoming closed-door meeting in Dubai. They are joined by hundreds of thousands of Internet users who are standing up for a free and open Internet. These people are in just about every country around the world — take a look.

If you agree and support a free and open Internet, join them and raise your voice:

Together, we can protect the free and open Internet. Please make your voice heard and spread the word.

Vint Cerf

Hurricane Sandy Closing in and Closing Down

October 28, 2012 in Miscellaneous

Hurricane Sandy

Hurricane Sandy is on it’s way and is expected to hit Southern New Jersey early on October 30. It is then expected to turn into a “Frankenstorm”, a new term conceived last week only as probably this is the first time this phenomenon will be witnessed by the modern world.

What is Frankenstorm?

One major storm merging with other weather systems and by which it’s destructive powers enhances. Coming from the Atlantic, Hurricane Sandy is expected to meet with the wintry weather moving east. This may turn Sandy into an icy hurricane. On the other hand the arctic winds from Canadian side are expected to join the forces to make it more lethal and what we may be getting is a Frankenstein of the Storms or a Frankenstorm.

Hurricane Sandy and Frankenstorm


What is expected?

  • Record tide as high as 3 meters.
  • Disruption of the lives of approximately 60 Million people in the East Cost of the U.S.
  • Possibilities of economic losses of the tune of U.S. Dollar 18 Billion.
  • Disruption of powers for millions for a week or more.

Hurricane Sandy and Precautions:

  • New York Stock Exchange (NYSE) will be closing the trading floors on October 30th. Trading will continue but will be moved to the electronic exchange.
  • Evacuation of 375,000 people to shelters. Hurricane Irene cause such first evacuation in the history of New York and this is the second.
  • Close to 6,000 flights are canceled. High possibilities of closure of bridges and tunnels.

HY Markets Trading Championship 2012

September 17, 2012 in Miscellaneous

Register Now and Become a Champion

The HY Markets Trading Championship 2012 gets underway on October 1st 2012 and runs for eight weeks, until November 30th 2012. With prizes worth a total of over $30,000 including overall and weekly prizes to be given away, do not hesitate to get started on your practice account to make sure you are ready and in top trading form ahead of the big kick off.

Unlike many other brokers, HY Markets allows you to trade in Forex, Commodities, Metals, Stocks and Index contracts all through the same account using the world leading MetaTrader 4 trading platform. The Trading Championship is no different, start with $10,000 and trade your way to the title of Grand Champion 2012 by making the most of HY Markets’ industry leading range of trading instruments and maximising your profit.

Don’t hesitate any longer, register today for your risk free practice account and start preparing, then on October 1st begin your quest to be named the HY Markets Trading Championship 2012 Grand Champion and win the first prize of $3,000 plus one year access to Trading Central.

At the end of each of the eight weeks of intense trading competition, the top three most profitable traders for the past week will be named and awarded. 1st place will receive $1,500 and 6 months free access to Trading Central, 2nd place gets $1,000 and 3 months free access to Trading Central whilst the 3rd most profitable trader for the week gets $500 and a month of Trading Central.

HY Markets is a worldwide leader in Forex and derivatives trading and allows traders to open a trading account with only a $50 minimum deposit. HY Markets offers trading through MetaTrader 4, mobile platforms and through the HY WebTrader with fixed spreads and leverage up to 300:1.

Trading Central is a leading provider of independent investment research to financial market professionals, specialising in the field of technical analysis. Founded in 1999, Trading Central now has offices in New York, London and Paris providing research to 38 of the top 50 investment banks, hedge funds, proprietary traders and brokers across the globe.

To find out more about the HY Markets Trading Championship and to get started, click this link: for more details. Be sure to review all competition rules and terms and conditions before you start. To keep up with news about the latest Trading Championship news, follow us (@HYMarkets) on Twitter.

Forex Blogs – August 7, 2012

August 7, 2012 in Miscellaneous

Forex Blogs At ForexAbode

Till now ForexAbode used to work on the concepts of only In-house contents and analysis. But in doing that, though we have a better control over the contents and over fighting spam but on the other hand we have been doing injustice to our continuously growing community. This is because FA is a platform for Forex traders and by Forex traders and there are so many Great Analysts, Strategists and Coaches whom we all need.

We break that ice by going live with Forex Blogs. We also hope that it will be a great platform for people to come, share, socialize and add value to each other.

A hearty welcome to all and hope your participation will make this ever going community stronger by the day.

Best regards



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