5 Tips To Picking The Right Broker
5 Tips To Picking The Right Binary Options Broker
One of the first steps you will take in your journey to becoming a binary options trader is choosing a binary options broker. Your broker is a company that operates a binary options website where you can trade quickly and easily using an online interface on your computer or your mobile device. The broker fills your orders for you and awards you a payout win you win and an out-of-money refund when you lose (where applicable). Since your broker is essentially borrowing your money while it is in your trading account, you can think of a broker as a kind of bank.
Check out our list of top trusted binary options brokers
If you are pretty well-to-do, maybe you enjoy the luxury of private banking. In that case, you may already have very high standards for the kind of service you look for from a bank. That gives you some idea of what you should be looking for when you select a binary options broker. If you do not enjoy private banking, you may actually be used to pretty bad service at your bank (banks have become notorious in recent years owing to their role in the financial crisis). Are you used to walking to your local bank branch only to be ignored, to lose money when the teller makes an error, and spending hours trying to resolve mistakes? Do you get charged unusual fees and end up ultimately not trusting your bank? That is not the kind of service you should be looking for from a binary options broker.
Being a profitable trader (or becoming profitable and successful in any walk of life) is largely a matter of taking your finances very seriously. Profitable traders give the best to themselves in terms of time and money management, trading strategies, and other aspects of trading. You owe it to yourself to find a broker that will take your investments seriously and serve you with the utmost respect and transparency. Here are 5 tips to choosing the right broker:
1.Read reviews and check out the broker’s reputation.
2.Read the FAQ, terms and conditions, and all the fine print.
3.Choose a broker who offers a demo account.
4.Look for features and trading tools that enhance value.
5.Test out the customer service team yourself.
1. Read reviews and check out the broker’s reputation.
How many binary brokers are in existence right now? There are dozens upon dozens of them, perhaps hundreds in all, and new ones are appearing every month. How much regulation is there? Not a whole lot, so unfortunately regulatory status is not necessarily all that helpful in trying to find the best brokers—some of which are regulated, some of which are not. Even those which are regulated are usually regulated as private banks, gaming businesses, or some other type of financial entity.
So what is the best way to determine the reputation of a binary options broker? Look them up on Google. See what kind of information you can find on third-party review sites like this one, and also look up customer reviews and discussions on trading forums for additional insight. Keep in mind that some reviews are affiliate reviews. These are typically easy to identify since they tend to use exaggerated and unrealistic language to describe your potential gains. Look for levelheaded, thorough reviews that include pros and cons. If you do not find many reviews for a given broker, press on until you find one which has a strong, well-established reputation which is largely positive.
2. Read the FAQ, terms and conditions, and all the fine print.
There are a lot of very good reasons you should read all the information on a given broker’s website before you commit. Firstly, it is simply smart to know what you are getting into. Maybe the terms and conditions are fair, but do not suit your needs, for example. Or maybe the terms and conditions are not fair, but you would never know (until it is too late) unless you read them. A lot of new traders are in such a rush to trade they just bypass all this information, and then wonder why they are losing money and dealing with hassles from the broker they signed up with. If you do not read the terms of service, it is no one’s fault by your own if a broker screws you over.
There are also situations that are not precisely unfair, but which could cause you inconvenience if you are not aware of them in advance. One very common one, and you will see this both with trustworthy brokers and with untrustworthy ones, is to set a high minimum withdrawal limit, even if the deposit minimum is very low. You may be able to start out trading with just $100, but would you really want to do that if the withdrawal minimum is also $100? What if you lost a trade, even a small one? At that point, if you want the rest of your money back, you are required to trade. Otherwise, it belongs to the broker since you can never withdraw it.
The solution? If the broker looks dubious in other respects, they probably are, and are hoping you fail to read the FAQ and make precisely this error. If they look trustworthy in other respects, the condition is likely not duplicitous, but it would still inconvenience you if you were not aware of it. If you deposit more money to trade with, like $250-$500 and trade conservatively, the withdrawal minimum should not be a problem. See why it is so important to do your homework?
3. Choose a broker who offers a demo account
While this is not an absolute must, especially if you have already demo tested with some other broker, it should still be high on your list of criteria. First off, it is critical to demo test for a while if you want to trade profitably and to make money consistently. If you just want to have some fun making wagers, it is not so important, but can still be helpful in learning how to use the website without burning money on the learning process.
This is not the only reason that it is good to look for a broker that offers you the chance to demo test. The other reason is that it is yet another mark of trust. A broker offering a demo account to new customers is saying, “We want you to have a chance to be profitable and become long-term customers. We are giving you the tools you need to ensure your strategies are working for you and that our platform suits you, without you losing money in the meantime. We care about your success.” A broker who does not offer this feature is encouraging you to lose money. The message is instead, “We want you to jump in headfirst, whether you are ready to trade profitably or not. Since we know that no trader will be profitable for long without testing strategies in advance, we are hoping that you will be foolish and we will make a quick turnaround before you wash out of the market.”
Which would you rather trade with, the first broker or the second? Do you want to be a short term success, and then lose everything, or would you rather build slowly and steadily with a broker that acts as a trusted partner in your business?
4. Look for features and trading tools that enhance value.
A lot of the best brokers really go above and beyond and deliver you more for your money than just a trading service. Instead of giving you the most basic platform with one or two types of trades, they give you a number of different trade types, features like double up, rollover, and early close, and other helpful trading tools and educational resources. The more trading tools a site offers, the more control they are giving you as a trader. Option Builder is another great feature which for many traders will be a must. With Option Builder you do not have to choose from available expiry times; you can set your own and also customize other features of the option you want to trade.
Learn about the trade options available by clicking here
Other good resources to look for are educational webinars, one-on-one training sessions, video tutorials (on trading, preferably, and not just how to use the website), and articles on strategy. Some sites will even send you trade alerts and train you in specific strategies. If you do not see these features listed directly on the bottom of the page or in the FAQ, take a look at the account tiers page to see if they are listed there. Oftentimes you will receive more special features and tools if you have a larger account and receive more personalized attention, which brings us to our next and most important section, customer service.
5. Test out the customer service team yourself.
If you are going to pay attention to any one suggestion we have made here, it should be this one. Any company is only as good as the service it offers its customers. That goes for binary options brokers as well. A broker can have all the features in the world and make you all the promises you can imagine, but still fail to deliver if the team itself is not concerned with your well being. Do not leave this up to fate; test the customer service team yourself to see if they will be worth working with.
How do you do this? It is very simple. Call up the company on the telephone and ask to talk to a sales representative. Have some questions ready.
- Does the sales representative answer your questions quickly and intelligibly, or does he try to give you a hard sell on opening an account?
- How comfortable do you feel, and when you hang up, do you have answers to your questions?
Try the live chat line as well.
- Is it actually staffed?
- If so, is it staffed by a person or a robot?
- Is the person friendly?
- Does she speak your language fluently?
- Does she answer questions quickly and informatively? Or does she give you a runaround?
Also try the email or web form option.
- How fast is the turnaround time on responses?
If you have a bad experience testing customer service, then move onto another broker. The brokers recommended on this site are brokers which have passed our customer service test, but that is no reason not to test them yourself. Find a broker which inspires confidence and with which you feel comfortable investing your hard-earned money, and you will be far more likely to succeed in becoming a profitable binary options trader.