Although binary trading is now well established and considered a respectable financial instrument by many traders; there are still several firms who have created brokerages simply to scam traders out of their hard earned money. Despite the fact that the majority of firms are now regulated; it is possible to remain outside of these regulations and still find traders who will use the services of these unregistered brokers.
Fortunately there are more good brokers than bad and it is actually very easy to decide if one is genuine or not.
It is essential to study any brokerage which you are considering using. You should be looking for online reviews; a firm does not need a perfect review score; all businesses have some bad reviews; it is simply not possible to keep everyone happy all the time. But, providing the majority of these reviews are positive you can be confident that you are looking at someone who is offering a good service.
It is worth noting that there are still some brokers which are new to the industry and may be offering a good service despite having very few reviews; positive or negative.
It is also worth looking at the information on a broker’s website. You will be able to calculate whether they are registered or not, where they are based, how they operate and even the types of trades they allow. It is also important to look at their website and which software they are using. The most popular software is Spot Option, although many brokers, such as Option365 use Tradologic. If it is not easy to find this information from their website you should be looking at other brokers.
Signs to look out for
Trading in binary options can generate significant rates of return. However, if the rate of return is exceptionally high you should consider carefully whether the broker is offering the service they say they are. Of course every broker will advertise the highest rate of return they offer and this can be as high as ninety percent for the standard trades. However, a reputable broker will also warn you of the risks which are involved in any transaction you undertake.
A second sign that you are looking at the services of a reputable broker is the educational material they make available on their site. These sites recognize that with the right education you will become a better trader and will be more likely to continue using their services. Any broker who has poor quality material or even a lack of information available does not have your interests at heart; it is best to steer clear of them.
The next step you should undertake is to study the terms and conditions; you should pay particular attention to the minimum deposit required, the minimum required to trade and any other information they provide regarding the cost of trading with them. The best firms, such as Option365 will not charge commission; they make their funds from the failed trades you make. If you are unable to locate the costs of these items it is best to walk away and try a different broker.
The range of options should also be an important consideration. Alongside knowing what is required to open an account with your chosen trader it is essential to know how many different types of account are on offer and how you qualify for them. The more flexible the broker, the more reputable they are likely to be as they recognize the importance of the customer.
Security is another issue which should always be taken seriously. Your personal and some of your financial details will be loaded onto the broker’s website. If this site and the transfer of data is not protected, and encrypted, you are at risk of having your data stolen. If the site is unable to encrypt your data then it is advisable to use a different broker.
Finally, to avoid being a victim of a scam it is best to choose a broker which has a reputable and professional customer service department. You should be able to contact the support team easily through live chat or, if necessary, email as well as the telephone. A broker which is keen to support any trader is looking to stay in business for the long term and is well worth looking at further.