Modern technologies and big variety of brokerage solutions make it pretty easy to launch your own binary options broker – all you need is money. Due to this fact it is getting harder and harder for a trader to recognize if a broker is a scam or not. We thought it would be a good idea for all traders, especially for the ones who make their first steps in the industry of binary options, to know how to choose a binary options broker.
We can say straight away that we have more than 4 years of experience in choosing the right broker for our traders, and all brokers which are mentioned on our website can be trusted! We don’t just add all of the brokers to our website, but we carefully analyse the quality of the service and speak to their representatives before we do. We are going to share our “check list” to save you and your money from scam brokers.
How to choose the right broker?
To be honest there is no such thing as right or wrong, different brokers provide different service. There are for sure no ideal brokers on the market at the moment and there will never be. Exactly for that reason professional traders always open accounts at least with two brokers to get the best out of binary options trading. Remember to always spend considerable amount of time on selecting the right broker to trade with, because eventually you are going to spend money on that, money which you earn with your hard work! It would be very frustrating to lose your money just because you were too lazy to spend around 10 minutes to analyse the broker. So here are the steps which we follow to recognize scam or untrusted broker:
- Regulations
- Security level of the internet connection
- Customer support
- Variety of payment methods
- Trading platform
- Clear “Terms & Conditions”
- Reviews on other websites
We will elaborate on all of those points, but to be honest in 90% of the cases it is very easy to recognize the broker which you should stay away from. First thing you have to do, is to go on the website and see how it looks. If design looks very cheap, it has grammatical mistakes and there is not a lot of information then just close it.
Regulation
We have a separate in-depth article about binary options regulators, but basically you should work only with brokers who are regulated by trusted commissions/financial institutions. For example, if you live in the UK then you should mainly work with brokers who have FCA licence, this provides you with the additional level of security. There’ve been cases when person have deposited money, and manager who works for this broker just lost all the money of the client, but broker had CySEC licence. After a letter to CySEC trader got his money back and the broker got fined for about 10,000 euros. CySEC and FCA are very strict with brokers, trying to make life of traders and investors much easier.
Internet Connection
All financial institutions should have https connection and encrypted service. It could be easily checked almost in every browser. In Google Chrome it looks like that:
Next to URL you can see the “lock” icon by clicking on which more information appears. This all shows that 24option has secure internet connection. Without such connection all visitors are at risk of being tracked, hacked or your data could be used by some third-party without any sign-ups.
Customer Support
You should only work with brokers who have quite big call centres, but you can’t actually see or say that by visiting websites. We have spent quite a lot of time figuring out is customer support good enough for our visitors. All brokers listed on our website have English customer support, which you can contact in several ways: telephone, email, or live chat. Those three ways of contacting should be by default at every trusted broker! Some brokers are happy to help via Skype, Twitter or even their Facebook pages, so look around before you sign-up. Customer support should be 24 hours a day, so that you can get help with your account at any time of the day – this option is almost standard for all big brokers, so shouldn’t be a problem when choosing a broker.
Payment methods
Broker should provide secure and transparent ways of depositing and withdrawing client’s money. Also, every broker should ask you to verify your ID (passport scan, proof of address and maybe picture of your bank card). It is normal practice and you shouldn’t be afraid to send your details through, because binary options broker is almost no different to a bank as a financial institution. Overall there should be at least 5 payment methods available, including Visa and Mastercard bank cards, and some electronic wallets like Neteller and Skrill.
Trading Platform
It is more of a personal decision for each trader, but we can say that there are loads of brokers which we wouldn’t trust and they use SpotOption platform – it is most popular platform (more than 170 brokers use this platform), but it is not the best. This is how it was in past: most brokers who had problems with payments or who went bankruptcy used SpotOption trading platform. There are other trading platform providers like TechFinancials, Marketspulse, Tradologic, TradeSmarter, OSystems, KeyStone and others. It is important to mention that there are brokers who developed their own trading platform, like IQ Option, which is pretty good compared to third-party software providers. We will try and review different platforms in near future, so stay up to date with our blog 🙂
Terms & Conditions
It is very important to read terms and conditions before you sign up. If you can’t find this section on binary options broker website, then just close it. Broker shouldn’t hide terms and conditions from their clients. Also, make sure you read them carefully if you are planning on taking the deposit, in some cases you are limited to withdraw your funds. To add more, Terms & Conditions should be pretty clear for you as a trader to read, for example it shouldn’t have more than 20 pages of information. Always read small font, broker might hide something in there.
Reviews on other sites
It is very important to visit websites about binary options with reviews from real people, who traded with particular broker before. The problem you might face that some reviews on the websites could be 100% fake. Brokers might try to create a positive atmosphere around their brand simply by paying for good reviews, which you think are honest. Also, remember that people are more likely to leave negative comments, rather than a positive one (how many positive reviews have you left, even if you really liked the product you bought?). To tackle this, you should visit 2-3 websites or forums where you can ask any questions about the broker. Furthermore, don’t hesitate to ask anything about the brokers, send us an email if you want our comments. We have a lot of experience and are happy to share it with you! Also, we are planning to launch our own binary options brokers ratings in near future, this should help a lot in choosing trusted broker.
In conclusion we would like to mention one more time, that the right way to choose a binary options broker is by googling review and if you can’t find any decent information then better avoid this broker. You should stick to popular big brokers, which have deserved to be called “top brokers”, and we know for sure they don’t want to ruin their reputation!
Add comment