If, in spite of every piece of sage advice and abundant evidence that the path of least resistance and the road to ruin are all too often one and the same well worn trail, you’ve set your sights on making money from binary options then you’re either very brave or very foolish. But either way you’ll be needing a trading platform.
A binary options trading platform provides the interface between a trader (that would be you) and a broker (or bookmaker if you prefer). It’s the means by which you place your trades (bets) and should also enable you to monitor your own state of affairs, study key market data and manage your money.
So, assuming you already have a sound grasp of the one thing that separates the successful from the losers, then… what are the key things to look for when choosing a platform and broker (the reality is that the two come together as a single package)?
Does the Broker Checkout?
Sounds obvious, but this is a field that’s not short on scam artistes of one kind or another.
That said, not everyone is crooked, so you need to sort the wheat from the chaff.
It’s always be best to go with a basic trading platform from an honest broker than one with a full complement of bells and whistles but operated by scoundrels.
Good starting points are reputation and evidence of regulatory compliance. It’s not exactly demanding to find this stuff out, just go looking. Fake reviews and bogus credentials always stand out so consign anything you have doubts about to the reject list and move on.
The US Securities and Exchange Commission publish lists right here of both scam outfits that are outright impersonating real ones or those who claim to be regulated/approved in some way but are in reality referencing bogus credentials. Also avoid any companies that operate off-shore (and hence beyond effective jurisdiction) – Cyprus being one of the usual chief suspects.
The U.S. Commodity Futures Trading Commission (which, as the name suggests, polices the futures market) also has advice on this matter. See – I said it’s not difficult to do research. So do some!
You also need to check for ridiculous minimum deposit requirements and enticing promotional offers (a common one being a first deposit bonus). These things come with more strings than a harp, all designed to tie up you and your money for all eternity. You do understand that the “free lunch” is a mythical beast? Well its close relative “free money” is cut from the same cloth.
Also determine the broker’s withdrawal policy and steer clear of those who stipulate an unreasonable waiting period for withdrawals. Coupled with this is how quickly they will payout on winning trades. It is your money after all; you ought to be able to access it as you wish.
Lastly, find out what level of support they offer and how responsive they seem. You should be able to contact support via phone, email and possibly also online chat. So try them out – pester them with a bunch of stuff and rate the response (or lack thereof). If someone is already worse than useless when they haven’t even got your money yet, you can figure out what you’re probably in for after they have.
Oh yeah, and be sure to also check out this black list of binary options scams.
Next up, evaluating the platform itself…
Does the Binary Options Trading Platform Checkout?
One of the most important criteria is speed. You will be making real time decisions and it is therefore crucial that the platform software be highly responsive. Also, look for web based platforms rather than anything that requires you to download proprietary software.
In this age of mobile computing you may well also want to consider support for mobile phone access, though that isn’t really much of an issue for quite a few people who are never far from a computer anyway. But it nevertheless indicates forward thinking and a broad range of support on the part of the platform provider.
Ease of use is another factor to consider carefully. You want the technology to make it easy for you to execute and monitor your trades, not hamper and confuse you. Does the platform present the information you need in a clear, accessible way?
Other features that you may or may not care to weigh up include online tutorials, access to a broad range of information, an active user forum and of course a demo account for practice trades. However, many perfectly good trading platforms don’t offer all these extras and it’s very much a matter of personal opinion how useful they are anyway.
A novice may well benefit from these additional services while experienced traders might equally have no use for them. Which way you swing on this topic depends on your own personality and level of confidence.
Finally, it almost goes without saying that the platform must provide secure network transmission (using at least 128-bit encryption) to ensure the integrity of financial transactions. This is money flowing back and forth so you don’t want it exposed.
Does the Trading Environment Checkout?
Ok, so assuming you’ve identified a suitable broker with a decent looking platform, now you need to examine what exactly is on offer behind it all. A great service that’s easy to use is not much use to you if it doesn’t also provide sufficient opportunities to make money.
First of all, what is it going to cost you to participate and what is the potential for profit? So check the size and scope of any fees and minimum/maximum trade (stake) restrictions. Also weigh up the win versus loss return rates.
The industry average payout for a win is 60-65 percent though can be considerably higher, like up to 90%. Clearly you should avoid accepting rates below the average but equally take a long hard look at anyone offering eye-catchingly high rates.
The return on a loss is typically between 15% of your stake and zero, nothing, nada, sweet FA. You will also often find that higher win payouts are accompanied by correspondingly lower returns for losing positions and vice versa. As the saying goes, you pays your money, you takes your choice.
And speaking of choice, you want it to be as wide as possible when it comes to various parameters such as what to trade (bet), what type of trade and when you can trade.
You want a good spread of markets and assets to bet on, including stocks, commodities, currency pairs and major indexes around the world. Which also means you need to be comfortable with the hours that your chosen platform is available since activity in markets varies as one financial center closes and another opens. For a good overview of working with this phenomenon check out this discussion of the best times to trade binary options.
Where particular assets are concerned you want a minimum of about one hundred (and preferably a lot more) covering the four main asset classes mentioned above, representing the principal world markets and supporting at least the US Dollar, Pound Sterling and Euro currencies.
You should also ensure that a number of different types of options are on offer – more on this in a future article, but at the very least the standard high/low, touch/no touch and boundary options should be available to you.
One of the main characteristics of binary options is that they are highly time dependent, and frequently with very short intervals. Accordingly the range, and especially the accuracy, of contract expiry times is a very big deal.You should expect to see daily, hourly, 15 minutes and even 60 second durations offered and accurately observed. If you find a broker/platform that is not totally on the button in this regard then start walking.
Finally, you need to be assured that the financial data you are working with is reliable and that prices quoted come from reliable third party data providers and are offered without spreads for buying either a call or put option on an given asset.
So anyway, once you’ve figured out which binary options trading platform is best for you, you’re going to be needing a trading strategy or several and you could do a lot worse than start by understanding one of the most basic binary options trading strategies that actually work.