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
First Impression
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.
First Date
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)
1.1 Languages
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.
1.2 Platform
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.
2.5 Fees
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.
3.4 Assets
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.
5. Regulation
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!