How to start?
If you made up your mind and decided to try investing in binary options, one of the crucial decisions left to make is the choice of the optimal broker. Once you type your preferences into the form on the right, you can follow our recommendations or analyze various features on your own. There are many brokers to choose from, but it is difficult to pick one since every broker has its strong and weak points, and only some services are into fair practices. For instance, one broker offers high returns but only if you choose a certain option, another has a complex platform and a wide range of assets; there will be another that offers support in your native language, and yet another offering great bonuses, but then again there’s the one who welcomes low deposits and minimal investments.
So which broker is the right one for you?
There are many forums and reviewing services where the discussions about binary options brokers never cease. Before you decide on a broker, peruse the opinions online. Bear in mind, though, that often those are the opinions of the actual brokers who advertise their service or, on the other hand, of those frustrated with their investments. It also happens that some owners of reviewing services only promote the brokers who offer them high commission for attracting new users, so they do not pay attention to any complaints directed at the “befriended” broker. Those are the services to avoid, because following their advice is just asking for trouble.
There are no perfect brokers. Even the regulated ones may turn out to be fraudulent and might be using their services to the detriment of our investments. Brokers presented here enjoy considerably good reputation and few complaints.
Demo account is everything
Inexperienced investors should choose a broker offering a demo account. Such an account enables a risk-free, first-hand experience of binary options trading using virtual money. It’s a great opportunity to test your strategies and their effectiveness before you invest your own real money.
A demo account is not a ubiquitous feature. Here is a list of brokers offering a demo account. Almost all of them activate such an account only after depositing some money (which usually can be withdrawn without any consequences), upon a special request and only for a short period of time, e.g. a week. Brokers claim that demo accounts is an additional burden on the actual platform, but one may wonder why it is not possible to have a separate server dedicated just to demo accounts… Another common explanation is that a demo account is not an accurate simulation of the process since it’s emotionless without the threat of losing actual money. This is mostly true, but it does not change the fact that seeing the platform “from the inside” is always helpful.
Here, we should mention OptionTrade, a broker who is offering an additional double funding of a demo account ($1000) and free binary options signals if you register an account from our service. Contact us if you’re interested in the offer.
Should I choose a regulated broker?
Binary options have been developing very dynamically and within a short period of time, which unfortunately means that it is a rather unregulated area of business. For instance, the British FCA (Financial Conduct Authority) treats binary options as a form of gambling and, consequently, those operating in Great Britain must seek a proper license. At the same time, according to European Union regulations once a country settles the issues of regulation, all the other countries follow automatically. That is why once it was settled in Cyprus (to be accurate, in CySec, the regulator in Cyprus), it became the norm in the other European countries. Also, as it happened with Forex, we can expect further regulations in time. Since a regulated broker does have an advantage but being regulated is not a necessity, we should not reject brokers just because they are not regulated. Being a regulated broker is often just a marketing tool and proves that the broker can afford it, but it does not mean that the investor is safe. Although an investor is probably safer with a regulated broker.
Which broker is the one for me?
There are plenty of services offering binary options which do not play by the rules, wickedly using the fine print in the terms and conditions, denying payouts due to some alleged missteps or even manipulating the platform and charts. It may so happen that you invest your money, choose winning options and still won’t be able to withdraw your winnings, or maybe even the principal deposit, and you’ll be jumping through hoops to do so (e.g. verifying your account over and over again). That is why we did our best to prepare a thorough list of the best brokers available.
Here is the current list:
And here is the blacklist of brokers, who can’t seem to stop using unfair practices on a monumental scale:
Before deciding on a broker we should also pore over every detail of the terms and conditions so that we won’t walk into any traps later on, e.g. receiving bonuses or withdrawing the deposit.
Binary options brokers offer a wide range of deposit/payouts methods. The most common options are:
- direct bank wire;
- credit card (e.g. Visa or Mastercard);
- CashU, QIWI, Webmoney, and Skrill.
Usually we can payout the money using the same method we chose when depositing money. If we deposit using Skrill, we will not be able to withdraw the money via a bank wire. If we deposit using a credit card, we can only withdraw money up to the point of that deposit. If we exceed the deposit, we need to transfer the surplus via a bank wire.
Using, e.g., a credit card also means verifying our personal data, which is why it’s crucial to give the broker the correct information upon registration. Verification usually applies to personal data (e.g. an ID scan), address information (e.g. a recent phone bill scan) or a payment method (e.g. a photo of the credit card). This is why it’s wise to verify your account before you deposit money, so that you can be sure that the process will be smooth and you will be able to payout the money afterwards.
As far as the deposits and payouts are concerned, it’s important to think about the payment fees connected with every method of payment. Skrill and PerfectMoney fare cheapest, while foreign bank wires are the most expensive, although some brokers often take it upon themselves to pay for the transfers.
Another important aspect is the issue of conversion: if you set up an account in USD or EUR and payout the money in another currency, you must take into account a double conversion fee. It is usually extremely costly, which is why it is better to deposit and payout directly from the same currency account (e.g. Skrill or a foreign currency account).
The minimum to deposit is usually set at, more or less, $200, but there are brokers who offer a lower minimum ($100). Still, it’s better to deposit more money since the minimum amount of money necessary to start investing is $10-20 and even the best strategy brings losses, so you may end up using everything. If you decide on a low deposit, go for a flat rate as well.
When it comes to how much money you should spend, it’s an individual issue. You should never invest borrowed money or money dedicated to paying the bills. Invest only the money you can survive losing. It’s a risky form of earning money, which means some gambling and a possible addiction.
It’s also worth considering if you want to make use of the bonus: it means you have more to invest, but it also means that you need to use it more than once. Using a bonus may also mean forgoing the ability to withdraw money for some time.
It’s best to go with minimal amounts of money to make sure that you can turn the money around and find out whether your strategy is successful. If you come to think of binary options as not your cup of tea, just pay out what’s left on your account.
Do not let the emotions get the better of you. Instead of imagining what to do with all the money you win, stay cool, calm and collected. Invest with your head, not your heart.