The Importance of a Broker
One of the most important things to be considered before someone becomes a binary options trader is to find a reputable Binary Options broker. The broker is the bridge to your investment and the market itself. If you want to gain profits, you should make sure that you are dealing with the right broker. Good strategies can be a big help in your trading activities, but you should have assurance with your account as well so that you will not have future conflicts in your payouts.
Here are some tips that I believe a trader should have in mind before joining any broker in the market.
Factors to be Considered
There are various factors that a trader needs to consider before making the final decision in choosing the right broker. Some of those factors are the broker’s regulations, their terms and conditions, the company capitalization, incentives and bonuses they offer, their trading platforms and their customer assistance.
When dealing with a business partner, you should give yourself an assurance that it is safe and legal before you hand in your investment. Checking to make sure that a Binary Options broker is regulated can be a complicated issue. But having a financial regulatory system governing the operation of a broker should always be considered. In the United States (US), there are regulatory organizations like the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC) . In the United Kingdom (UK), they have the Financial Services Authority (FSA). The broker’s regulation will also depend on their location. Traders should research their prospect broker beforehand and check if they are regulated. On the other hand, regulated or not, the success of the trading activities does not rely on that factor alone and it only gives you assurance that you are dealing with legal business entities.
Broker’s Terms and Conditions
A business should always start with contracts or in other words, terms and conditions between an investor and the company. Traders should always read (the small print) about the policies of the company they are joining. Starting with answering questions like, how much is the minimum investment and how easy it is to withdraw their investment if ever they want to? Brokers offer different minimum deposits that ranges from $100-$250 and they also incur withdrawal fees and have processing days, all of which may take time as well. It is also important to know what mode of payment or banking options the broker accepts. Before you jump into your investments, make sure you understand every detail of their terms and conditions so that you will not blame everything on your broker in the end due to your own negligence.
The Company Capitalization
The market capitalization of a broker acts as its backbone. It will give you confidence that they have enough money to sustain the business, and your money will be returned in case of a bad business scenario such as bankruptcy.
Incentives and Bonuses
Given that you already surveyed a lot of well promoted brokers and they have a lot of similar features, something to check is what incentives and bonuses they can offer you if you decided to invest with them. Brokers oftentimes will offer you a free demo account to let you try their trading features, but you should not respond to it instantly. Be aware as some of them have hidden charges, and it does not mean it's free at the end. Some brokers will also offer 100%-200% bonuses that depend on your deposits. They will also offer access to trading webinars, and account managers that will trade on your behalf. One should always make sure you understand the rules of these benefits before you get too delighted by the offers.
A good broker should have a flexible platform for a trader. There are two basic types of platforms, web-based or non-web-based. A web-based platform lets a trader invest anywhere and anytime they want and in fact, mobile applications are now offered by some brokers to let their investor trade using their smartphones. Non-web-based platforms require software that needs to be downloaded to a desktop, and a trader can only trade using that specific desktop. The platform should have detailed and specific information any trader will need to have. Find one that works best for you.
Asking for help will always be a hard task especially in business, but if a broker has a 24/7 customer assistance, it will be a plus on their part. Approachable customer service representatives can make a trader’s life easier because they can ask any question regarding their trading activities anytime. Live chats, phone calls or video tutorials are positive features of good customer assistance. Some well-known brokers also offer their account managers to personally assist traders with their strategies and techniques. There are also trading academies for clients and powerful tools to guide them. Language translations from their support staff could be a great help as well.
If you truly value your money, you should choose a broker carefully. The facts and false information can be seen everywhere on the internet, so make sure that you will not be blinded by the good or the negative comments of competing brokers. Be vigilant enough to look for resources that know the truth about them. Every broker has their own disadvantage, but doing your homework will allow you to find a broker that will work for you and your money.
Binary options are an exciting trading option, but don’t get too excited to invest a lot of money right away. Try to open a demo account first and work with the customer service representatives to learn the pros and cons of the broker. Taking things slowly will surely help you avoid losing too much. So before you decide, think about it many times first.
Vinz de la Fuente
INO.com Contributor - Binary Options
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.