Forex, Binary Options and CFD Brokers Check List
Trading With Brokers Content
3. Trading Platforms
4. Payouts Offered
5. Assets offered
6. A Friendly environment
Important Risk Note:
Trading binary options can generate significant benefits but also involves a risk of partial or full funds loss and should be considered by initial investors.
We strongly advise that you read our terms & conditions and disclaimer page before making any investment.
Customers must be aware of their individual capital gain tax liability in their country of residence.
Finding the best broker is not always easy. There are over a 200 brokers to choose from. We at Binary Umpire always suggest going for the very best.
A trustworthy broker in our eyes is one that is
– Fully Regulated.
– Customer Friendly
– Pays out on time
In this guide for selecting the right broker for your trading activities, we’ve identified various factors that a trader should consider before contemplating which broker to trade with.
A fully licenced broker is one that adheres and is registered with a regulatory body. Check out Red card page for what we consider as a regulated broker.
By the way some markets remain unregulated in which case you are better off with an unregulated broker if you are based in those markets. In such instances we would look at reviews from prior and existing customers of that broker before deciding to invest.
The financial market is largely an Over The Counter (OTC) market and this makes it difficult to subject a particular company to a specific set of regulatory framework.
In the United States (U.S.), brokers are self-regulated by the Financial Industry Regulatory Authority (FINRA), a self-regulatory organization of the brokerage industry and the Securities and Exchange Commission (SEC). For those brokers that are based in the United Kingdom (UK), the task of regulating brokers falls under the ambit of the Financial Services Authority (FSA), a quasi-judicial body. Individual member states of the EU have their own respective regulatory bodies. In general we would look at (Cysec) for guidance.
3. Trading Platforms
There are many types of trading platforms on the market. With binary options most of them seem to be web-based. Most have their own branding and platform theme.
We at Binary Umpire prefer
– A simple to use platform. Spotoption themed platforms are generally recommended
So let’s break it down.
Binary brokers offer different types of vehicles on their platforms.
The classic option is UP/DOWN or PUT/CALL.
-This is the platform you’ll see offered by all the companies. Ideally you will have a chart available to look at before you choose the asset type. The duration may vary between 60 seconds, short term trades 5 min- 30 minutes or longer term trades which can be end of day trades or longer.
The next platform offering is One-Touch.
Your trade depends on whether you think the asset will touch a certain point by a set expiry time or not. Pay-outs offered on this trading type are great than traditional classical approach but so are the risks.
The next platform is Boundary trading or Range trading
With this platform the trader assumes whether the asset will stay within a set range or outside of that range by the pre-set expiry time.
With all of these option types, look for companies that offer charts with a good history timeframe, and very little deviation from charting platform’s and real market. This holds more water especially if one is trading shorter term trades.
Some of the better brokers are even offering mobile trading types where you can open their platform from your iPhone or Smartphone using a downloadable app. Your account opens so you can keep an eye on your open positions, execute a trade and even deposit funds.
4. Pay-outs Offered
Below is a list of features that you should look for before making your selection.
– Sufficient Returns on Money Invested
The general norm is that if a trader correct determines an asset movement within a specific period of time, he or she will be able to reap a percentage return based on the amount of money invested.
However, this percentage return varies from broker to broker, the asset traded and the expiry time selected. Generally any put over 75% to make it worthwhile for you to invest in.
– Pay-out for out-of-the Money Trades
The main disadvantage with binary options is that when your trade is even out by one cent from the predetermined price, you will be out-of-the money. Some brokers do offer compensation for loss of trades of between 5-25% of the trade value.
5. Assets offered
Be it Commodities, Stocks or Currency Pairs, traders have their choices. Perhaps your expertise is one major currency such as the EUR/USD or just trading Gold. If that’s the case, you will want a broker that offers you the best pay out with this asset.
Most brokers offer multiple currencies trading. The basic bread and butter pairs are EUR/USD, USD/JPY, GBP/USD, AUD/USD and USD/CAD. Every other pair are generally considered ‘exotic pairs’
6 A Friendly Environment
Customer service is key! Check out the amount of languages offered by the trading platform. How can you contact the customer services representative? How quick are they to respond?
Check out reviews from Google on the broker. What have other said above their experience with the broker?
Do your research? From these basic investigations you can get an idea of how serious the broker is and how much they value their clients.
We also want to check whether our funds are safe? A broker that has the full regulatory body, has the necessary data protection in place and utilises encryption SSL software are our preferred choice. If your transactions are not encrypted, you will subject yourself to hackers can steal your financial data.
Most binary options brokers offer welcome bonuses and trading promotions. Be sure to ask your customer service representative what they are currently offering. Also find out the trading conditions which apply to that bonus. i.e. The broker may give you 100% bonus but when can you withdraw it? What trading volume must you reach before you can take it?
Before opening an account be sure to check the ‘About us’ and ‘FAQ’ Section. Also don’t be afraid to ask. Don’t just get tempted or lured by bonuses and offers. Trade smart and always treat this like a business.
Broker is choice is a fundamental part of the trading regime. Don’t sell yourself short. Go for the very best. Be sure to check out the Red Card section and our reviews before making a decision.
Most of all don’t gamble with money you can’t afford to lose. Trade smart, be safe and always look to improve.