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Selecting the right broker can be a difficult task for beginners since new traders are mostly not aware of all the important differences between brokers and trading platforms. Each platform offers a bit different set of trading tools, return rates, expiry times, bonus deals, etc ...
Some brokers offer extensive support for beginners by providing written and video tutorials that introduce all the aspects of binary options trading. In addition, some brokers will also offer live trading webinars.
If you never traded before it is advised to open a free demo account with at least one of the proven and reputable brokers, to get familiar with the basics of binary options trading.
Different brokers use different trading platforms. There is a difference between a broker and a trading platform.
- A broker is a trading service provider, usually owned and run by a specific business company.
- The trading platform is a software or an interface, which displays the market charts and enables the trader to place trades.
The types of trading which are offered by specific brokers depend on the choice of the broker as well as on the technology of the trading platforms they use.
Most common trading platforms for binary options trading are SpotOption, TechFinancials, TradoLogic, Panda TS and TradeSmarter. Many brokers offer their own independent trading platforms which are in many cases in-line or even better when compared to the platforms offered by external third party providers.
Trading platforms differ by trading types, expiry times, responsiveness, trading tools and other built-in features such as technical analysis charts, market sentiment display, signals or other similar features.
Types of Binary Options Trading
Broadest selection of different trading features are offered by brokers who use the SoptOption and TechFinancials platform. Depending on the broker selection of features they want to use, the platforms themselves enable the following types of trading: Short Term (30sec, 60sec, 120sec, 180sec, 5min), Regular Call & Put Options (with 5, 10, 15, 20, 25, 30, ... etc expiry times, up to end of day expiry time), Long Term (with expiry times at end of day or at specific date, end of week, end of month, etc), Touch Options, Boundary or Range Options, Above/Below Options, Option Builder, Ladder, Pairs or Pair Stocks, and lately some brokers are also introducing classic FX trading possibilities. When looking into trading options it is also very important to take a look at the expiry times offered for specific trading options.
When selecting a broker it is always good to pay attention to have flexible expiry times available. In addition to 60 seconds trades, offered by most brokers, it is very good to have the possibility to select 2 minutes and 5 minutes expiry times as well. For the longer expiry times it is always good if the broker offers the option to select as many different expiry options as possible. The expiry times and general list of trading options available will usually differ, based on the trading platform each broker offers. For example, the brokers who utilize the TechFinancials trading platform offer the best flexibility in the expiry times for regular call and put options and a wide selection of trading possibilities. Example of two such brokers are 24option and Boss Capital. These brokers will give you the possibility to implement many different trading strategies and systems, because all their trading options are very flexible.
Different binary options brokers offer different return rates on investments. The difference for similar options can be even up to 10%, which acts as an decisive factor in making profit or loss with your trading. As a general rule it is always good to choose a broker who offers high return rates, however this is not a single or most important factor. If you don't have the flexibility with previously described expiry times, you might find it difficult to implement your own profitable trading systems and even the high return can rates will not compensate for the lack of expiry times selection. Keep in mind that the return rates on short term trades are always a bit lower as return rates on regular options (with expiry longer than 5 minutes). A good return rate for short term trades (60 sec to 5 minutes) are anywhere above 72% and a good return rates on regular options are anywhere around 80%. Brokers who offer 'touch' or 'high yield touch' options or 'ladder trading' for example, will give you the possibility for much higher return rates on these trades, ranging from 250%, even up to 500% or higher. But you have to be aware that such trades can be placed only in specific market conditions and quite some experience is needed to recognize the best situations where to place such trades.
All brokers tend to offer different bonus deals. For example, if you deposit a $250 the broker will match your deposit amount and give you up to 100% bonus, so you will have $500 on your trading account available to start trading. When dealing with bonus offers you have to be aware that all bonuses come with specific conditions. Usually the condition is that you have to trade a certain volume worth of trades before you can withdraw your profits. For example, if you take a 100% bonus deal, the turnover can be even up to 40 times the amount of bonus. So in case you invested $250 it would mean that you have to make $10.000 worth of trades (win or loss) before you can withdraw your profits. Bonuses are always welcome, but you if you decide for a bonus make sure you are aware of the conditions which are tied to specific offer. Different brokers will offer different bonus conditions. However, to be able to freely withdraw your profits at any time, signing-up for a bonus deal is not advised for a first time trader.
There are two types of brokers - regulated and unregulated. Main difference is that regulated brokers will not accept traders from United States and unregulated brokers usually accept USA traders as well. Among the regulated brokers a large number of them is registered in Cyprus because of favorable taxing policy. All regulated brokers who are based in Cyprus are regulated by the national securities commission CySec. CySec offers additional security for the traders, since their regulatory requirements are quite strict and oriented towards protecting the traders investment against any fraudulent activity. Additionally, brokers can be regulated in other countries by other country specific commissions who handle Forex, CFD, commodities and binary options trading platforms. Opening an account with regulated broker will give the trader additional security. However, the regulation limits the brokers from accepting the traders from USA. Many brokers choose not to get regulates, simply because they wanted to continue offering their services to USA traders. In these cases it does not mean that, if the broker is not regulated, it is not a good choice. Some unregulated brokers still hold a good reputation among their traders and there are no complications with trading or payouts on their platforms. However, the traders from USA are limited to selection of unregulated brokers only, if they want to engage in binary options trading.