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Binary Options Brokers – How To Choose The Right Broker
Choosing the right broker is vital to your success as a trader.
However, in binary options this task can become very difficult, since you are essentially trading against the broker.
Unfortunately for the binary options market, it has been infected with scams and dishonest brokers that have used their unregulated position to steal money from customers.
There are many things a trader can do to improve, but unfortunately one of the things he can not influence and control, is his broker.
Brokers play a number of roles.
- They provide operational trading platforms.
- They store traders’ funds until they are withdrawn.
- They control the available liquidity pool.
- They process and sync all trading activity in the market.
- They provide support to their clients (traders).
The role of brokers in the binary options market is too important to be taken lightly. This is why traders have to be very careful where they choose to deposit their money.
Brokers can also function as market makers, providing liquidity which enables traders with very small amounts of money to still have the chance at participating in the market.
Is the broker regulated?
Regulation in the binary options market is still an issue in many countries. At the moment, the US, UK, Japan, Australia, Cyprus and Malta can claim to have solid regulatory frameworks for the binary options brokers. In many countries, binary options is seen as a gaming activity or put under regulatory oversight of gaming commissions which have no rules on segregation of client funds.
If you want to trade binary options, you may start to look at the issue of regulation of brokers a lot more seriously than before.
You can no longer afford to keep your money in brokerages which are not regulated or which have no obligations as required by laws to segregate your money. Putting your funds in such brokerages is a very risky business.
So when choosing a broker on the basis of regulation, you must get answers to these questions:
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- Does the broker have a license number issued from the country’s regulators. You must confirm this information from the regulators.
- Does the broker actually segregate the funds of its traders, and do the regulators that oversee their operations enforce this function?
- Can you be sure that the broker is actually based in the country where it claims to be domiciled?
Some brokers have been blacklisted recently for infractions bordering on these points. Do your due diligence and ensure you have accurate information in this regard.
When it comes to trading binary options, the trading conditions matter immensely.
This has to do with the structure of the market and how brokers in this market actually make money.
Apart from the US where binary options are exchange-traded, in many other countries this is not the case.
Binary brokers do not make their money from commissions, but from losses of traders on the wrong side of the market.
Most binary options brokers are trade counter parties. Some of them skew their online platforms to increase profits. However, it is a lot harder for them to do this on medium and long term contract expiry times than on the short term trades.
Furthermore, there is talk about brokers having risk management teams that bookmark accounts of traders who make too much money at the broker’s expense. Some are more honest about this than others.
Customer service departments came into existence to enable clients ask questions or get solutions to some issues bothering them about the service of the company.
In binary options, there will be lots of issues to talk to the customer service about.
You will therefore need a responsive customer support service from your broker, which can be reached at all times (at least on trading days) and also via Live Chat.
In addition to a quick response time the customer service should also be able to answer most of your questions about the broker’s conditions as well as the trading platform. Some brokers offer outstanding customer support and it is actually one of their biggest pull factors.
Certain issues need to be dealt with quickly and the best way to do that is by direct communication. Choose a broker with a responsive live chat.
Prompt withdrawal settlement
It is only good that when a trader makes money from the market, he is allowed to enjoy the proceeds of such an investment via prompt fulfilment of withdrawals from the broker. Many brokers for reasons best known to them have come up with all manner of obstacles to prevent this from happening. This is usually a fine line and many scam brokers do this because profits for traders mean losses for them.
How do scam brokers operate in this regard?
- By putting unreasonable withdrawal caps,
- by applying hefty charges on withdrawals,
- by tying withdrawal ability to high trade volumes meant to cover a bonus.
You need to be very careful of brokers that change their withdrawal policies randomly, as this is one of the early signals that a broker is starting to have cash flow problems.
Policy on bonuses
Because online binary options brokers are often in direct competition, they will often offer promotions, perks, and bonuses to get more people interested in their service. Generally speaking, the perks they offer increase with the amount that you deposit, and you can find a number of promotions specifically for first-time traders. These special offers can greatly benefit you, particularly when you’re just starting out.
However, beware of brokers who place very heavy trade volumes as a prerequisite for making withdrawals on accounts which have been awarded bonuses.
Bonuses are a good thing, but they have been widely abused. It is simply not right for a broker to expect to make from a trader more than 100 times what has been awarded as a bonus.
Choose a broker with a responsible bonus policy.
Bonuses are supposed to work in a symbiosis, but where one party starts to profit heavily at the expense of the other, the arrangement loses its core values.
This is partly why Japanese regulators have issued laws regarding how bonuses are to be managed, and also why Australian regulator ASIC is planning to introduce regulation to have them stopped altogether.
Choice of contract types and assets
Use brokers who give a generous offer of the kinds of trade contracts which can be traded on their platform.
Some traders will find they are much better at trading certain options and markets than others. For such traders, choosing a broker with a lot of flexibility in how to trade assets, will be a major benefit.
All binary options brokers will offer different assets within the categories of stocks, commodities, currency pairs, and indices and some will also offer cruptocurrencies.
Expiry times offered
Because there are different trading strategies and risks associated with the various expiry times, it is important that you find a broker that has the right expiry times that will work for you. Even though who offer high speed training have different ideas of what high speed is.
Some have high speed expiry times of 60 seconds while others offer just 15 second expiry times for these trades. Some binary options brokers offer much longer expiry times of a month or more while others consider the end of the day to be a longer expiry time.
If you are new to binary options and don’t yet know which you prefer, it may be best to go with a broker that has a wider variety of expiry time options to choose from so you can find one that fits you best.
Ease of transactions
Many payment options have evolved over the years which give traders plenty of flexibility in how they can deposit and withdraw funds.
So unless your country is under a financial blacklist just as the US recently blacklisted Crimea, you should choose a binary options broker which offers you a variety of transaction methods such as credit/debit cards and various e-wallet options such as Skrill, CashU, Ukash, Sofort, etc.
In the EU today, binary option brokers can only open trading accounts to licensed and professional traders. In many countries binary options are classed as gambling, which is not necessarily a bad thing in itself. In some countries it is illegal to trade or operate binary option platforms.
Today, the best option for new or existing binary option traders is to trade with a regulated CFD and Forex broker.
Although it is important to take your time while choosing your broker, it is also vital to understand that brokers are not the only determining factor when it comes to making money in trading online.
The most important thing is to learn how to trade and manage your risk.
Most popular brokers
Many readers ask which brokers are the best. It is difficult to point to one specific broker because it’s often a matter of preference.
Due to new regulations many of the biggest and most known binary brokers have closed or modified their operation to fill a different market demand.
To trade safely and with a peace of mind, look for regulated brokers with the best user reviews and various international awards.
EasyMarkets is a good example of a fully regulated, time-tested, reliable broker. Over the years, it has won 37 international awards and gained a lot of loyal customers.
How to Choose Your Binary Options Broker?
Binary Options (might also be called digital options) are now banned in many countries and have lost almost all their popularity but despite all this, you can still trade them on many global brokers. So if you insist on trading binary options, this guide would help you make the right decision regarding your broker of choice.
There are still enough companies to choose from, but with differences among them: one gives you high profits, another an advanced trading platform, a third broker has the best customer service ever and you’ve also heard about a certain broker who provides a bonus of up to 100%. Choosing the right broker is not an easy task, most brokers just seem the same, so ThatSucks.com are glad to bring our readers a comprehensive guide, based on our binary options articles.
This guide, based on our research and experience, will help you get started trading with a broker that doesn’t suck. Before reading this “how to choose your binary options broker” guide, our readers are strongly advised to read our Binary Options Articles where more information is available. It’s an extensive library where you will find tons of knowledge, ranging from Types of Binary Options to Top 5 Binary Options Beginner Tips, Regulation talk, even a huge Glossary and a lot more.
Choosing the Right Binary Options Broker
Here is where the story begins. It’s the first time you have ever met. You don’t know much about each other, you’re total strangers. Much like most relationships, the first look and the first impression could lead to a first date. First impressions are always a bit shallow, but hey, if you don’t like his/her look, there won’t be the first date!
Firstly, look at the design, check out the trading platform. In today’s industry, most platforms are easy to use and quite user-friendly, just make sure your PC is compatible with that specific platform (don’t download a Mac version and try to use it on your Windows PC). As for the design, don’t get carried away when you see a fancy modern design. Make sure all links are good. Check to see if it’s professional and well built. It’s important to understand that entering any binary options website should be like walking into a bank; it should look good and be completely organized. It’s your money we’re talking about. The first impression is a basic step before even registering (registering shouldn’t cost money). Finally, check out the returns, refund (in case of out-of-money), bonus (follow the bonus instructions article) and other promotions. Every broker has its own advantages and disadvantages to these aspects. The best place to start your search is by searching our Binary Options Brokers list, which includes reviews, information, and our client’s feedback about most of the brokers out there.
So you like what you see and you go out on a date. It’s a little awkward, but it’s fun getting to know each other. What do you do, what do you like, how’s your cat doing? Whatever.
Check out their learning tools because binary options education is quite important. Starting with a demo account is highly advisable so look out for binary options brokers that provide demo accounts.
From the aspect of learning binary options trading, some brokers have great tools to help both amateur and experienced traders alike but you shouldn’t decide what broker to use just based on the education they offer. Let me explain: lots of other websites – ours included – offer great educational resources and often they do a better job at it than brokers do. Brokers focus more on general stuff about binary options, not about specific strategies, indicators, and money management. For a more complete education, please visit our Binary Options School, which contains a Preschool, Primary School, College, PhD and a Tests section to make sure you emerge a real trader once you’ve completed it. Educational material and binary options guides are very important; therefore if you’re a new trader, try to avoid brokers who don’t supply these important materials. Also, if the broker provides this type of materials, it shows concern from their part for their traders and obviously you want to trade with a brokerage that cares for you.
Another very important general issue is the support. Try to contact the live chat support, see how fast they answer and check out more details before investing. In case of support hasn’t delivered sufficient information (I recommend writing down some questions before contacting support) try and contact them over the phone if you wish to get some clear answers. No one forces you to invest, make up your mind and ask the right questions. I know that every time I write a review about a certain broker, I ask specific well-prepared questions. I do the same if I desire to trade binary options with the broker. The support crew is important since they could really help with trading issues and other problems. Good support is a requirement when it comes to binary options trading.
First “Are We in a Relationship?” Talk
After a few dates, things are going great. You are getting to know each other; you might even like her/him. The first “real” talk about your relationship is right around the corner, the point of all or nothing.
After checking out the above and everything seems in order, it’s time to make a decision. You find the trading platform is OK, the support is great and there’s tons of learning materials. So what’s next? Decision making. Making a decision requires digging in the trash and the back alleys. Check out terms and conditions, according to the ThatSucks.com manual (find it here). It’s important to understand how the deposit works and what are the fees attached. It’s even more important to check the withdrawal options. We also recommend searching for any broker complaints, scam alerts, frauds, etc. It’s quite simple and could really help. Another major issue is the Bonus. You should know that most bonuses offered by Binary Options brokers are not free and they come with strings attached. The most well known disadvantage is that your money will be tied to the platform until a certain turnover (trading volume) is reached. This volume differs from broker to broker and it is somewhat normal for the industry but many brokers have outrageous conditions and actually block your own money from withdrawal, not only the Bonus you’ve received. It’s an important aspect, so make sure you read our article about Binary Options Bonuses to learn more. Once you’ve read and understand all restrictions, it’s time to go forward. Next step – the Deposit!
First “I DO”
The moment of truth. Are you ready? Is there another alternative or should you follow your heart?
As much as I would like to make this last step seem more important, it’s actually only an addition. So if you think something like “here goes my marriage” – I’m sorry… Some binary options brokers have some extras that distinguish them from other brokers; some of these extras are a real treat. As I was saying before, don’t let extra perks determine your decision. If you find a great brokerage, especially among our Recommended Brokers list, but they don’t have lots of cool extras – it’s all right. It’s not a must. It’s a fine addition but not a deal breaker.
Step By Step List – Putting It All Together And Choosing Your Next Broker
- 1. Accessibility and Support
- 2. Bonuses and Promotions
- 3. Trade-Related Aspects
- 4. Training and Education
- 5. Regulation
1. Accessibility and Support (or – The Common)
Although this doesn’t seem such a big issue, it may as well be. English is a widespread language, but not everyone speaks or understands it. In fact, a lot of people just speak their native language so they will only look for a broker with a website they can understand.
It is known that some platforms are more user-friendly than others, but they can lose some of the complexity required by advanced traders. This category is closely related to the type of trader you are: if you need special orders and complex tools, you will probably go for a platform which is more focused on those aspects than on ease of use.
1.3 Customer Support
Many wannabe traders have no idea where to begin so they need guidance; they need a person to talk to and to teach them what to do. That’s why a lot of people compare brokers by the Support offered and by the knowledge possessed by the broker’s Account Managers or Live Chat operatives. Customer Support also extends to deposits and withdrawals or any technical problem that may arise.
2. Financial Aspect (or – Your Money)
2.1 Returns and Refunds
Well, it goes without saying that usually, traders want a high-payout broker. After all, who wouldn’t want to make 80% on an ITM trade instead of 65%. The refund offered for Out of the Money (OTM) trades adds more depth to your money management techniques and is another common way of comparing brokers. However, it must be noted that nowadays very few brokers offer a refund for OTM trades.
2.2 Bonuses and Promotions
Some traders hunt big bonuses and it’s the main aspect they check when choosing a binary options broker. However, a big bonus is not always the best way to go because it comes with strings attached and often requires you to trade a certain volume before you can withdraw. Most brokers also have special promotions but these are usually limited time offers.
2.3 Minimum Deposit
Some traders just want to “test the water”, not being totally convinced that they want to trade Binary Options and that calls for a small deposit. After all, you wouldn’t want to deposit a thousand bucks just to see if trading is really for you. Other people just can’t afford a big investment and have only a few hundred bucks available for trading. It depends a lot on what type of trader you are and how deep your pockets are. Find more on types of traders in our PreSchool section.
2.4 Withdrawal and Deposit procedure
Sometimes withdrawing your money can be a daunting task which is made even more difficult by some brokers. This should be a main concern of every trader. After all, it’s frustrating (to say the least) to see your account grow but to be unable to withdraw fast and easy. Sometimes people also look for an easy way of depositing, not only withdrawing. A quick PayPal procedure is sometimes favored over a wire transfer that requires the trader to go to the bank and fill in all that paperwork.
Usually, withdrawals are accompanied by some fees which differ from broker to broker. It is normal for a trader to want those fees to be small and that’s why this is a common way to compare brokers. However, a broker can have several types of fees (maintenance, inactivity fees, etc.), not only for withdrawals. So I would recommend a careful read of their Terms and Conditions. The lower the fees, the better.
3. Trade-Related Aspects (or – Your Trading Plan)
3.1 Types of Options and Tools
Are you looking for the basic stuff like UP/DOWN options? Or do you need other types such as Boundary IN/OUT, One Touch/No Touch or 60 Seconds options? Trading tools like Close Now, Roll Over, Double Up or Option Builder are also an important factor when choosing your broker and depend on the Binary Options Platform the broker uses.
3.2 Expiry Times
Some guys wouldn’t touch 60-second options and others would never trade a monthly expiry. It all depends on the type of trader you are and what makes you comfortable. Of course, if your strategy is developed for 60-second options and Mr. BOB (aka the binary options broker) doesn’t offer such a short expiry time, it’s time to look for another one.
3.3 Trade Amounts
This is an important part of choosing your broker and it’s directly related to the sum you want to invest. For example, if your entire account is $100 and the minimum amount per trade is $25, just 4 bad trades will blow your account (assuming the broker doesn’t offer a refund). So if you want to invest a small amount in your trading, you will also want to look for a broker who offers small position sizes.
Some strategies work better on a certain asset category than another and some traders are focused only on a few assets. Actually, this is a deal breaker and most traders will dismiss right from the start brokers who don’t offer the exact assets they want to trade.
4. Training and Education
Trading without some form of training and education is gambling and since you are not looking for a gambling website, you will probably want to choose a binary options broker who is good at teaching you how to trade. In this category, we include e-books, webinars, tutorials, one-on-one training, signals and information provided by your Account Manager. Some Brokers also offer a demo account but most of them will require you to make the minimum deposit first.
Unfortunately, scams are a reality of the Binary Options industry and the best way to protect against misconduct is to go for a regulated broker. That’s a good idea but at the moment, a regulated broker is pretty hard to find… not impossible though. You must be aware of the fact that some websites tell you that certain brokers are regulated even if they are not so making sure your information is correct. Keep in mind that some BOBs have a good reputation although they are not fully regulated; our Recommended Brokers section will give you more information.
The Bottom Line When Comparing Brokers
There is no single or best way of comparing brokers. As you can see, there’s a multitude of factors which must be taken into consideration when deciding to open a Binary Options account with a broker. Maybe broker X has small deposits, but broker Y has a great platform and excellent returns; it all depends on what you are looking for, what has more weight for you and last but not least, it depends on what type of trader you are. However, it would be wise to disregard any factors like a cool name of the broker, the beauty of the girl in the Live Chat picture (or home page), promises of quick profits or gut feeling.
If all of the above feels a bit overwhelming for you, don’t worry because our broker reviews compile hours and hours of research and cover all aspects and categories discussed here in a friendly and easy to digest form. We also rate each broker, giving them a fair assessment and bringing you an easy way to decide what your best choice is, whether you want to trade BO, CFDs, Cryptocurrencies or fiat currencies.
Well, that’s it, folks. Make a smart decision and always remember – Even the Best Brokers Suck Sometimes!
Binary Options – How To Choose The Right Broker
Binary options are becoming a more and more popular and accessible tool for exchange trading for private investors. However, most beginners with no experience or professional expertise make a lot of mistakes which are critical to their trading results. One of the main causes of loss of capital in binary trading is the choice of a brokerage platform which is unsafe and professionally unfit for effective trading. In this article we will offer a list of recommendations which will allow you to choose the optimum platform, based on its trading conditions and technical tools, for consistently profitable results with binary options.
So, let’s first understand the need for a broker for the implementation of trading processes and profiting. The presence of a mediator for working with options is necessary due to the legal conditions on the market which are set by regulators. Only having the status of a legal entity and a market regulator’s license allows you to directly enter into transactions with binary options. For this reason, the online investor needs a broker to register transactions on the binary market on their behalf.
When choosing a brokerage company many investors rarely pay attention to the complete list of the company’s working conditions or their technical capabilities. This eventually leads to negative results. In addition, the choice of an unsafe and non-professional trading platform can lead to collaboration with scammers who simply do not give you the opportunity to earn money and eventually take possession of your funds. For these purposes, there exist many schemes and technical approaches – from quote fraud to the outright theft of your investment. Against this backdrop, we recommend working with the resources of systemic, licensed companies, which occupy a fairly large segment of this financial services market.
The safety and professionalism of the broker can be determined in a number of ways – by using company ratings on special informational services or by making your own conclusions based on analysis of the broker’s activities and its professional services and tools. The latter method is the most effective and allows investors to determine the best possible operating conditions for binary trading instruments for themselves.
How is a professional broker different ?
On this issue, we offer a list of conditions and technical parameters for brokerage companies that are the hallmark of a secure platform with professional trading services for binary trading:
- A license from the national regulator of the trader’s country of residence
- A professional terminal, preferably a proprietary design, on which a variety of technical analysis tools and a wide range of support services are available
- A demo account – a quality training simulator available only on professional platforms
- Free training
- Quality analytics
- The minimum trading conditions
- A wide range of marketing related offers – bonuses
- Positive feedback from traders
As an example of a secure platform with a list of professional services that contribute to obtaining good results, we can offer the platform for online trading from the European Binomo broker, where investors can take advantage of the following range of services:
- A license from the Russian financial market regulator FMRRC
- The broker’s trading terminal is equipped with an indicator and chart set of analysis tools, gives access to a wide range of assets, and offers options yields of up to 90% and the maximum number of additional technical tools
- A demo account on the main trading platform for training in real market conditions
- A system of free training based on progressive approaches
- Daily professional analytics
- The widest possible range of bonus offers – for account replenishment, recurrent promotions, and professional tournaments with big prize pools
- The minimum trading conditions – a trading account starts at $10, the amount of the minimum bet is $1
- The bulk of traders’ reviews are positive which gives the broker a good reputation
Taking into account the list of indicators for the company, the existence of a regulator’s license, as well as the availability of professional technical tools on the broker’s trading platform, this platform for binary trading is safe and effective for use on the binary market.
By choosing the right broker, you will be able to maximize your potential on the matter of consistently high earnings and save yourself from the unpleasant consequences of working with fraudsters.
Best Binary Options Broker!
Perfect Choice For Beginners and Middle-Level Traders!
Free Demo Account! Free Education!