When it comes to binary options trading, selecting the right broker for your needs is an absolute must. There are so many things that a broker can and should do, and losing sight of these things can cost you thousands of dollars each year in lost profits. Spending a few hours making sure that you have the right broker is going to be well worth the time that you spend. Here, we will go over the things that will be of most use to you, and the things that many people believe are important, but truly are not.
First, there are a few basic things that your broker must have if you wish to be successful. Your broker must be reliable with a stellar reputation. This will go a long way toward protecting your money from scams. Unfortunately, a few scams have ruined the reputations of a lot of brokers, and it’s now important that you check everything to do with your broker in order to protect the security of your cash and your identity. Also be sure to check whether or not your broker has an easy to use platform and a helpful customer service department. Reading online reviews and talking to other traders can be a big help in this respect.
Next, ensure that your broker has the assets you wish to trade at competitive rates. The difference in just a couple percentage points per trade can make a world of difference. 2% per trade equals $2 for every $100 you risk, $200 for every $10,000, and $20,000 for every $1,000,000 you risk. If you trade 20 times a day, 300 days a year, at $100 per trade, that’s equal to $600,000, or over $10,000 in lost profits. There’s no way to avoid the fact that that is a lot of money—and it’s only because you were trading at the wrong broker.
This is really all you need out of your broker to succeed. The rest is nice to have, but it isn’t a big deal if you don’t have them. The biggest of these, and sometimes the most misleading of the extra features; is having a big bonus. Listen, everyone likes having free money. But bonuses are well thought out by brokers and not as much to your advantage as you might think. First, they aren’t actually free. You need to unlock them. The bare minimum unlock threshold that you will find in the binary options industry is 30 times your bonus amount. If you are given a bonus of $1,000, you must trade $30,000 worth of options. If you are not already a highly skilled trader, there’s very little chance of making this money back. And, if you have any degree of success, your profits will be much higher than your bonus. Let’s say you trade 300 $100 trades with a 75% rate of return, and you are correct on 185 of those trades, you’ve made a profit of $2,375. The extra $1,000 is nice, but definitely less than what you’ve made, and hardly worth $30,000 of risk. In a different light, it only brings your profit rate up from just over 8 percent, to just over 11 percent. It’s nice and if you can get it, you should, but it’s not an essential point of focus.
Also, education sections can be helpful, but a lot of the information that binary options brokers have on their site is available in other places and can be self serving. These can be helpful, but not necessarily as some brokers use them to promote certain trading products over others.