In this post, I will guide you on how to select a good binary options broker to start your trading account with. While I know you are excited to get going, not every broker is good. We aren’t going to jump into it and risk getting involved with a scam broker. Not only will you be denied profit, you may even get cheated of your capital.
Thus, I’ve created for you a list of 9 Key Questions to Ask When Selecting A Good Binary Options Broker. Trust me, I’ve had my fair share of “lessons” in the past! Please bear with me. Today’s lesson is going to be lengthy, but necessary. All good foundations need that extra bit of time!
9 Key Questions To Ask When Selecting a Good Binary Options Broker
- Who Are They?
- Do They Accept People From Your Country?
- How Long Have They Been Around
- How Is Their User Interface (UI)?
- What Features Do They Have
- What Are The Assets and Payouts
- Are They Regulated and Who By?
- What Deposit and Withdrawal Methods Do They Offer?
- How Efficient Is Their Customer Service?
#1. Who Are They?
It’s always good to know who is behind the broker. Are they a team of individuals assembled for a long-term purpose in providing good binary options service. Or, is it just a sole greedy investor out to make a quick buck?
#2. Do They Accept People From Your Country?
If a broker has the best UI, top regulation, highest payouts – but if they don’t accept people in your country, then what good is it to explore them further? Click on this link to see an updated list of which brokers you can use based on your location.
(In fact, by reading till the end of this whole lesson article, you will know which brokers you can use and which you can’t)
#3. How Long Have They Been Around?
If a broker started out 3 months ago, or even a year ago, there’s going to be a lot of kinks in the system that need to be worked out. Unless I have to, I’d avoid jumping into a new broker. Nowadays, on my social media channels, I’d only recommend brokers who’ve been around for at least a year and half. That is the usual time required to get past their nitty gritty problems.
#4. How Is Their User Interface?
For example, there’s only one regulated company that provides regulated binary trading solutions to people in the USA. It’s called “Nadex”. The problem with Nadex is that it’s so difficult. As a result, people there look into other non-regulated solutions, like Binary Cent. (only other broker available to US-residents but shady when it comes to withdrawals! Click at your own risk).
While difficult to use is one thing, other brokers I’ve seen were stuffed with so many external plugins for news feeds, chart analysis, price alerts and what-not – that they not only looked cluttered, they were slow-loading and constantly crashed. What I seek in a broker is fast-loading, clean-minimal interface, adequate charting features, with good and precise execution.
Thankfully, most of the brokers I have on this recommended list fit this bill!
#5. What Features Do They Have?
From my previous section, you will know that loading speed takes priority. One such example of form and function would be Spectre.Ai. Not only are they the fastest web-based, they also have useful features like news alerts, timezone indicator, and a “trading ideas” tab.
Generally, the features I will want the broker to have is candlestick charting, the ability to zoom out enough such that the candles look like lines so I can get a good overview. Expert Option timeframes only go up to 60s at the max, and you can hardly zoom out at all. Basic indicators I’d want are Bollinger Bands, RSI, Moving Averages, and the ability to plot trend lines and fibonacci extensions.
#6. What Are The Assets and Payouts?
How many currency pairs are there available for trading? I would generally expect there to be at least 6 available pairs at any one time. Most brokers have few selectable assets in the Asian session, but some of these brokers have 14-30 currency pairs, crypto currencies, commodities, and even stocks and stock indices available for trading during the London and New York sessions.
How are the payouts? I expect payouts to be at least 70% during the London and US sessions. If liquidity and payouts are low during Asian session or Holidays, i.e. 50%, i’m fine with staying out at those times but want to be able to trade when it isn’t.
These days, broker payouts are fairly competitive. Many of them offer payouts within the 75-90% range.
If you have the benefit of choice, i.e. if you live outside of US, Canada, EU, UK – What do you trade more often? Expert Option has very high payouts on Brent Oil. Olymp Trade has the highest payouts on Crypto Binary Options. IQ Option has generally higher payouts on currency pairs. One of these probably has higher payouts on indices – just that I didn’t notice because I don’t trade indices much.
#7. Are They Regulated? And, Who By?
It’s fairly important that you go with a regulated broker, but it’s also important to know who regulates that broker. Some regulatory licenses are easy to obtain, and they may not have any practical protection benefit to you if they are just 4-5 underpaid employees in a shabby building. The harder they are to obtain, the more protection it offers you. If you’re living outside the USA, Canada, Europe and United Kingdom, I will encourage you to go for highly-regulated brokers. IQ Option for instance, carries licenses from CYSEC, ESMA, FCA, VFSC, FMRCC – and maybe more! Olymp Trade and Expert Option also publish their regulatory information on their websites.
However, if you live in those afore-mentioned areas (USA, CA, UK, EU), these regulation bodies in fact prevent you from trading binary options.
While regulation is important, it isn’t everything. There are also brokers with long track record that have strategically decided not to get regulated, or have relinquished their regulation license so that they are able to accept more international clients. Ayrex is one such broker that has been around for a long time, offers decent payouts, processes quick withdrawals, but has chosen not to be regulated so that they can still accept clients from Europe.
Spectre.Ai has cleverly run circles around the regulation, and yet are able to provide binary traders a safe trading experience by decentralising what is typically broker-side operations to blockchain smart contracts handled by a network of processing nodes. They let you keep money in your own crypto e-wallet, and only earn commissions on the trades you make. They are currently the best option if you’re from Canada, Europe, or UK.
#8. What Deposit and Withdrawal Methods Do They Offer?
More brokers offer credit card deposit as a standard. In certain countries like Singapore, money control authorities wish to control money outflows to these externally located brokers, so those who wish to trade have to use online E-wallet services, or crypto currency.
If you deposit via credit card, the usual policy with brokers is that you cannot withdraw to the same card more than the amount deposited. The reason for this is that the withdrawal is given in the form of a credit card charge reversal. Thus, the excess will have to go via a different method.
With IQ Option, when I made a withdrawal to credit card, I saw the CR transaction on my online statement within 3 working days. Olymptrade processes their withdrawals to Skrill nearly instantly. IQ Option and Ayrex both processed my withdrawal in BTC within hours.
Being able to deposit or withdraw in crypto currency is a great plus point for those in Australia, where money in-flows to personal accounts are tightly monitored for taxation by the government. Most of the brokers on my recommended list offer deposit and withdrawal in major cryptocurrencies.
Spectre allows you to keep your deposit in Ethereum without conversion to fiat, so that you can grow your ETH balance at the same time.
#9. How Efficient Is Their Customer Service?
So far I’m most impressed with IQ Option and Ayrex customer service. When there is a server outage or price feed error, IQ Option customer service reps are well abreast of what’s going on. One of their unpublished business practices I have long loved is that they treated all open trades during server-outage as profitable trades even if the actual outcome may not be such. Don’t quote me on this though. Despite several people in Binary Lab can confirm similar experiences with IQ, this is really up to them and could change at any time. Generally speaking, most brokers will just credit you back the original trade investment under such circumstances. What I like about Ayrex is they reply my emails to their help department within 30mins-2hours which is faster than 1-2 days which most brokers take.
Summary: How To Select A Good Binary Options Broker
After going through this 9 Key Questions to Selecting a Good Binary Broker, I hope you now have a better idea of which broker to go with. You can proceed to my “Recommended Brokers Page” where will shortlist for you which brokers are available based on your geographic location.