How do I know which Binary Option Broker to Choose?
Broker selection. This is perhaps the most important factor in a beginner trader’s binary option success. Everything else is secondary. So much hinges on broker selection, that it can indeed single-handedly determine whether one ends up a successful broker, or quitter a few steps down the path, with his bankroll bled dry.
The difference from what one binary option broker offers to another is enormous most of the time, in just about every respect.
The first and most important broker selection factor one should consider is regulation
This is a must have feature as far as we’re concerned. A broker can offer the best bonuses, the best return rates and the best possible minimums on deposits and withdrawals, but if it isn’t regulated, you shouldn’t even grant it consideration. Unregulated brokers can essentially handle your money the way they please and that is indeed what they’ll do most of the time. The end result is that – whether you’re profitable or not – you will never see your deposit again. Regulation is of the essence. A regulated broker – if unfair – may still attempt to twist the arms of its traders, but it can only do so within the confines of the law. It will never be able to just plainly steal one’s money.
Licensed binary option brokers fall into two main categories: US-regulated brokers and what we call CySEC regulated brokers. CySEC is short for Cyprus Securities and Exchange Commission. While the two sets of regulatory rules cover two radically different business models on the part of brokers, either is good.
Deposit and trade-minimums
The minimums a broker sets on trader deposits and individual trades, determine the accessibility of the services it offers. The lower these minimums are, the more accessible a broker is. It needs to be said though that taking a healthy bankroll into the trading arena can have a massive positive impact on one one’s overall odds and performance.
The informal average minimum on deposits in the industry, seems to hover around the $250 mark. The trade minimums vary in the $10-$25 range. Low investment minimums allow traders to exercise a much-refined capital management, so they always represent a net positive.
There are brokers out there however, who only require $10 minimums on deposits and $1 minimums on trades. Again: while the $1 investment minimum is indeed superb, it is recommended that one deposit much more money than $10. There’s natural variance involved in the activity and a bankroll as flimsy as ten minimum investments will hardly tide one through.
Money-wise, the issue of bonuses is also a factor for some traders, but due to the mostly prohibitive turn-over requirements on such bonuses, most traders will simply ignore this part of the equation.
Deposit/Withdrawal methods and support
This is another obviously important aspect of broker selection. One needs to have the right money management paths available to be able to trade the way he/she prefers to. Support is one of those things one always hopes he won’t have to call upon. Most of the time though, one will in fact have to deal with support, for deposit/withdrawal issues or for something else.
This is self-explanatory really…The higher percentage one picks up after a successful trade, the more lucrative the overall activity will be over the short- as well as long-run. In this respect, one should never settle for anything under 80%. Some of the best brokers out there offer return rates as high as 90%, and maybe even some rebates on losing trades.
Educational and Trading tools
Although I’ve left if last, this is probably the second most important broker-selection factor, after the regulatory status. Like it or not, beginners and advanced traders alike will need some sort of help from a signal service, if they intend to walk a sustainable path to success. The best scenario in this respect is if the said signals are provided by broker itself. Most brokers offer some sort of tools in this respect, but again, the differences among these offers are enormous. For instance, your broker may offer you access to MT4 charts and indicators. Other brokers may give you a few ready-made signal generators, or they may have their own team of in-house experts, feeding you trade alerts.
Still others take this whole aspect to entirely unexpected heights. There is at least one broker out there who has put a full trading-robot creation platform to the disposal of its clients. Through this platform, traders aren’t just able to build more or less intricate trading robots using a combination of technical indicators, via a wizard or from scratch. They also gain automatic and free access to the most successful trading robots created by their peers. They are welcome to tinker with the finer settings of these robots and even to back-test them on historic data.
The bottom line: what you want is a regulated broker who gives you top-notch, cutting-edge tools and education, coupled with great minimums and a superb return rate. Yes, asset-selection, option types and all those other details covered in most online broker reviews, are important too. They are nowhere as important as the features covered in the above article though.