How to choose a binary options broker

Making money on the Internet is becoming more and more popular every year and choosing a binary options broker is becoming increasingly difficult. And this is not surprising, because this financial instrument is one of the simplest and allows you to very quickly start trading on global financial markets. But for trading to be profitable and comfortable, you need to choose a truly reliable binary options broker , which may not always be easy. Therefore, in this article, we will look at the ten most relevant and important factors that influence the choice of a broker and its activities, and also tell you how to choose an honest binary options broker correctly without losing your money.

The correct choice of a binary options broker depends on various indicators, and in the article we will consider:

• Broker licenses;
• Bonuses offered by the broker;
• Minimum deposit with the broker;
• Training from a broker;
• Options for replenishment and withdrawal of funds;
• Broker capitalization;
• Quality of technical support work;
• Terms of trade;
• Tips for beginners when choosing a binary options broker;
• Conclusion.

Next, we will consider each factor in more detail, after which choosing a broker will be much easier.

Availability of licenses from the broker

Every week one or two new binary options brokers appear on the market, the origins of which are quite questionable. Such brokers most often do not have licenses or appropriate other people’s certificates. Also, licenses can be forged, but this only applies to fraudulent brokers , which of course you should not choose. In other cases, brokers who plan long-term cooperation with traders and other clients try to obtain at least one license, and in some cases even several.

It is also worth noting that the lack of a license does not mean the broker is unreliable. Perhaps this broker is new to the market and its license is under review, but it is still safer to choose a broker with regulation, and it is better if there are several licenses at once.

There are quite a lot of regulators in the world, but only a few can be considered reliable, since everything depends on the country in which the regulator is located, as well as on the powers of this regulator. The trust of traders and investors from the global community in such an organization also plays an important role.

All brokerage activities on exchanges are licensed by country:

• Russia . The license is issued by the Federal Service for Financial Markets.
• USA . SEC (The United States Securities and Exchange Commission), in addition, brokerage activities are controlled by FINRA (Financial Industry Regulatory Authority) and NFA (National Futures Association).
• EU . Licensed by the legal norms of the European Union trust standard.
• Great Britain . The FSA (Financial Services Authority is the central supervisory authority for the financial services market) and a quasi-judicial regulator.

There are also simpler regulators, which are essentially commercial organizations, but the presence of their license can also indicate the quality of the brokerage services provided. Such regulators include:

• CySEC (Cyprus Securities and Exchange Commission) ;
• TsROFR (Center for Regulation of Relations in Financial Markets) ;
• BVI (British Virgin Islands);
• FLV (Vanuatu Financial License);
• MFSA (Malta Financial Regulatory Commission).

Let's take an example of the first two regulators, which are the most popular among most brokers in 2022.

The Cyprus license allows you to operate outside the CIS and therefore most often it is popular with those brokers who plan to work not only in Russia, but also abroad. Quite a few binary options brokers obtain such a license, as although it is useful, it is quite difficult to obtain.

The second regulator, namely TsROFR, is the most popular regulator in Russia and allows brokerage activities throughout the Russian Federation. Despite the fact that it is easier to obtain such a license, it is not issued to everyone, since to obtain it it is necessary not only to pay a fee and open an insurance account with an amount of at least $20,000, but also to provide a large package of documents, which are carefully checked over a certain period of time . And despite the fact that the Center for Financial Markets is a less authoritative regulator than CySEC, the presence of its license still indicates the quality of the broker.

Some traders may think that having a license does not give anything, but its essence is that if any problems or disagreements arise between the trader and the broker, the regulator can help resolve the dispute and compensate for the client’s lost funds or fine the broker. Therefore, the decision about which broker to choose is best based on the availability of a license.

Bonuses, promotions, gifts from the broker

Welcome bonus , that is, a bonus for the first deposit into an account, is an important factor that is often taken into account when choosing a broker. However, do not forget that free cheese only comes in a mousetrap, and therefore this point should be discussed with the broker immediately. Sometimes it is better to refuse a bonus than to comply with all its conditions.

What is offered to you for free is fraught with danger: there is usually a cunning trick or a hidden obligation behind it. Something worth paying for is worth paying for. By paying your way, you eliminate the need for gratitude, guilt, and deception. It's often smarter to pay full price - you can't shine and save at the same time. Do not spare money, make it work, generosity is a sign of power and attracts it.

Robert Greene "48 Laws of Power"

Also, some brokers may provide a Welcome bonus, which does not require replenishing a real account with your own money, but it is worth noting that such a bonus can only be received once. Broker Pocket Option is one of the brokers that issues a Welcome bonus. Receiving a Welcome bonus from the Pocket Option broker is quite easy and this opportunity should not be missed, since the trader does not risk anything in this case.

For those traders who already have trading accounts, you can use promotional codes and bonuses , which make it possible to receive various useful gifts and additional funds when replenishing your account.

Minimum deposit

For new traders, when choosing a broker, it is extremely important that the company allows you to start trading with minimal amounts. This gives you the opportunity to try trading on a real account, and also allows you to start earning money without large investments. And if previously only very large brokers allowed a minimum deposit of $5-10, at the moment almost every binary options broker gives the opportunity to start trading with such amounts, which is undoubtedly a big plus and attracts many new traders. Examples of brokers with a minimum deposit for trading are Pocket Option ($5), Binarium ($10) and Quotex ($10).

Of course, you can choose a binary options broker with a higher “bar” for starting trading, but you should understand that the larger the minimum deposit the broker has, the higher the likelihood that he is a scammer, and an example of such a broker would be Daily Trades , which trades with you could start with $250. But as a result, this brokerage company did not withdraw profits, and in some cases, the deposit itself.

Training from a broker

Now on the Internet, everyone can easily find a lot of both paid and free educational materials on the topic of trading. But if the choice of a binary options broker falls on a company that provides training in the basics of binary options trading, then this will be a plus.

Thanks to such training, there is no need for the broker to look for different materials, and you can begin to study what is specific to trading on the trading platform of this broker.

Some binary options brokers may only provide basic training on the technical side of trading, but sometimes you can find more complete training that, after theory, will provide trading strategies that you can use to improve your skills on a demo account .

Experienced traders, of course, do not necessarily need to pay attention to companies that help educate their clients, but for beginners this can be an important criterion when choosing a binary options broker.

Replenishment and withdrawal of funds

If a broker has too few ways to fund your account , this should lead you to think that perhaps he is not doing so well financially and it is not worth choosing such a brokerage company for trading.

A reliable broker must have the ability to use bank cards, bank transfers, electronic wallets, and in addition – cryptocurrencies and mobile operators. If a brokerage company allows you to use only a few methods for depositing and withdrawing funds, then you should refuse the services of such a company. And it is important that the broker has a payment system that is convenient for you, otherwise you will then have to lose interest on transfers and conversions between different payment systems.

Some brokers may charge fees on withdrawals, and this is something you need to find out in advance, especially if you plan to make transfers more than once a day. In addition, the broker may have restrictions (limits) on daily, weekly or monthly withdrawals and this should also be taken into account when choosing a broker.

Broker capitalization

Most likely, no one has a question - which broker to choose, a large one that has been working for a long time or a new one and little-known. The choice here will be obvious due to the many advantages that a reputable and large binary options broker can provide.

Since in large brokerage companies the daily turnover of funds is quite large, payments to traders up to $1,000 are not noticeable for the broker, while in a new company it will be much more difficult to pay even $250-500. And if there is nothing to pay the new broker, then there will be delays that can last for weeks. And if the broker turns out to be a fraud (which often happens among new companies), then you should not expect to return even a tenth of your deposit.

Therefore, in order to choose the right binary options broker, you should definitely pay attention to its popularity and size in the field of binary options, which can be confirmed by its founding date, availability of licenses and a large number of clients.

Technical Customer Support

The attitude towards clients in the company is also important, since you can often find reviews from traders that the support of a certain broker works very slowly or completely ignores its clients.

If you were able to choose a binary options broker correctly, then literally immediately after registration, support calls the trader back and provides all the information he needs. Therefore, when registering, it is better to indicate your real phone number.

Also, when choosing a binary options broker, you can spend time and check the work of the company’s managers before registering, first contacting them via chat or by phone and asking questions of interest. To understand what a broker is, you can ask the manager about:

• availability of license or regulation;
• methods of depositing and withdrawing funds;
• available trading instruments;
• trading platform (this can be a web terminal, a terminal for mobile devices or a terminal for a PC);
• bonuses and promotions provided by the company.

If the support works well and the company values ​​its customers (both future and present), then answers can be obtained even to the most frequently asked questions several times.

If the manager answers for a very long time, is unclear, or does not know the answers to the questions, then you should be wary and think about whether it is worth choosing this broker.

Also, many specific terms are often used in trading, so even if you have basic knowledge of any of the proposed foreign languages, it will be difficult to understand all the nuances. Therefore, it is better to choose a broker that provides the platform in your native language. It wouldn’t hurt to study a trader’s dictionary to understand the meanings of different words.

Trading conditions

Trading conditions are one of the most important factors when it comes to choosing a broker for trading binary options, because if only a few instruments are available for trading with the only possible expiration in one hour, then it will be almost impossible to trade profitably with such a broker. Such trading conditions can often be observed with fraudulent brokers or brokers who are not committed to long-term cooperation. Examples of such brokerage companies are KingTrade and BinTradeClub .

Also, when choosing a broker, it is important to study the capabilities of the trading platform, namely:

• number of assets traded;
• percentage of payouts on options;
• choice of expiration time;
• availability of a demo account;
• ability to view trading history on a chart;
• mobile app.

Be sure to review the list of assets available for trading. It is possible that this broker does not have the asset that you are going to trade later. In turn, brokers providing a small amount of assets should raise additional suspicions. In a large company, at least 30-50 types of trading assets are most often available for trading, which include currency pairs , shares of American, European or Russian companies, commodities (gold, oil) and cryptocurrencies ( Bitcoin , Ethereum ).

Different brokers estimate the payout percentage differently, and these differences can exist for completely different assets and at completely different times. This is primarily due to the fact that some brokers themselves open similar positions on these assets, but in much larger volumes, and the percentage offered to you serves as insurance for the transaction. If you win, the broker will receive a much larger amount, from which he will pay you. If you lose, your funds will compensate the broker for the loss of his bet.

Expiration time is perhaps the most important technical point in binary options trading. If the forecast of the direction of price movement is still being analyzed, then it is very difficult to determine the required expiration time. Therefore, it will be better if the broker provides as wide a range of expirations as possible. Most often, expirations are limited to a 4-hour period, but there are brokers that allow you to trade with expirations of one day or even more.

A demo account, of course, is not a fundamental factor when you need to choose a binary options broker, but it is better if you have one. On it you can try out all types of binary options trading or practice your new strategies without the risk of losing your capital. A demo account will be especially useful for beginners, as it allows you to understand the principle of options trading, test the trading platform and see what options are available and what instruments can be used to buy them.

A convenient trading history is very useful when you need to collect statistics on your trading and understand where mistakes were made. This will help you reconsider your trading if it is unprofitable. In order for trading statistics to be successful, at the time of making transactions it is important not to deviate from the rules of money management and risk management .

Also, if you are a regular user of gadgets, then the presence of a special application for trading from a smartphone or tablet can help you choose a binary options broker. Although such trading is not the most convenient in technical terms, it allows you to track your transactions anywhere there is an Internet connection. Also, in applications from brokers, the same opportunities are always available as in the web terminal, and without a PC you can deposit and withdraw funds, conduct analysis, use indicators or signals . In addition to standard trading , the Pocket Option broker's mobile application allows you to receive free analytics, signals and strategies.

Which broker to choose: tips for beginners

The following tips and recommendations will be useful not only for beginners, but also for experienced traders, as they allow you to study the company more deeply and choose the broker as correctly as possible.

If the broker meets all the parameters described above, then it is worth checking the implicit points that few people pay attention to. And you should pay attention to:

• quotes;
• company managers;
• the presence of trust management.

If a binary options broker is a scammer, then it is not necessary that he will not pay out profits, but he may be committing other types of scams that will still cause many traders to lose money, and one of these options may be “fixing” quotes.

Checking quotes with a broker is actually not difficult, but you should do this not on a demo account, but on a real one, and therefore it will be necessary to top it up with a minimum amount. After this, you will need to compare the quotes from the broker's platform with any other reputable platform. This could be the TradingView platform , the MetaTrader 4 terminal , or a live binary options chart where you can find any trading asset that exists in the world. If the quotes differ by only a few points, then this is quite acceptable, but if the difference is more than 10 points, then this broker is likely to be a scammer and you should not choose it for trading.

Company managers can be different, and some help clients understand any issues, while others, on the contrary, can force them to purchase some services or trade based on company signals. If calls occur very often (for example, every day) and the manager offers to trade using signals or special analytics, then you should not choose this broker, since almost always in such cases the client’s money will be lost . And this can happen both through the fault of the client himself, who will make transactions based on recommendations, and through the fault of the analyst, who can trade for the client.

Of course, to check whether the manager will constantly call, you should not top up your account with large amounts, and a minimum deposit will be enough. Usually, the personal manager immediately starts calling and first simply asks to top up the account with a large amount, and only then offers other services.

If the chosen broker has a trust management (which is extremely rare among binary options brokers), in which the company manager is also constantly persuaded to invest, promising large percentages on profits, then they should not be trusted and it is better to leave this broker, because if large companies and begin to engage in trust management, they will not persuade their clients to invest. Most often, this is done by scammers who simply want to get the client’s money and then safely “drain” it.

Results: how to find a broker for a beginner

In conclusion, I would like to say that beginners may initially find it difficult to approach when choosing a binary options broker, since quite a few different factors and conditions play a role, but in fact, after trading with several brokers, even on a demo account, you will have a certain understanding of what you should pay attention to.

It is also worth remembering that you should not start trading on a real account with large amounts, since you don’t know what may happen in the end, and therefore it is better to start with a minimum deposit or even divide your trading capital and open accounts with several brokers for safety. It is especially worth avoiding brokerage companies whose minimum deposit is more than $50.

And an additional way that can tell you how to choose a binary options broker is to study the reviews and comments of other traders, since it is easier to learn from the mistakes of others, rather than your own. And since there are many resources and forums on the Internet where almost every existing binary options broker is discussed, it will not be difficult to find any information and decide whether a given brokerage company is worth your attention.

CHOOSE THE BEST BROKER

See also:

How do binary options brokers make money?

Verification of account with a broker

Broker doesn't withdraw money?

How to make money on binary options