One question that I see asked a lot is what is the best binary options broker? Indeed, If I had a dollar for every time that I had seen this posted or received an email to this effect I would have retired long ago as a very rich man.
The choice of broker seems to preoccupy many individuals to the exclusion of all else when it comes to trading with binary options. Indeed this is often a stumbling block which gets in the way of actual trading.
Many traders spend hours researching and compiling information prior to opening an account. Then within five minutes they wipe out their account due to using an ill conceived strategy. Surely this wasn’t down to the choice of broker?
Of course this is not too say that making the right choice of broker is not important. Indeed, using the best binary option brokers can make a difference to your trading results. However the gains that you can make from eking out a few percentage points of profit on each position are likely to pale into insignificance compared to the damage that a poorly executed strategy can do to your capital.
Research
A quick look at some online discussion and bulletin boards will reveal more posts and comments on the merits of different brokers than about money management strategies. I therefore wonder whether many traders could actually improve their performance if they spent more energies on refining their strategies than worrying over their choice of broker.
Ultimately in the regulated world in which we now operate, the question we have to ask is whether there is big difference between different brokers in the market place or are they all just different shades of vanilla? If there are differences what are these and just how much effect are they likely to have on our trading performance?
Returns
One key area which separates the bad from the best brokers is the profitability of the contracts that they offer. Despite ever increasing competition between brokers for customers, the range of returns offered still various quite considerably.
Let’s take a look at a typical hourly binary option contract on the EUR/USD. At a given point in time the return offer for a higher outcome ranged from 72% to 83% across the brokers we checked. Admittedly this does not factor in any potential rebates on offer but nevertheless, an 11% difference between the top and the lowest return on offer is significant. Over a succession of winning trades, the difference in profitability between two traders trading the exact same contracts would prove significant in monetary returns.
Platform / Functionality
The trading platform will determine what the broker offers in terms of functionality and trading features. Brokers are continually expanding their range of contracts and adding new features to their platforms in order to stay abreast of their competition.
However when it comes to picking out a broker on the basis of the functionality and features offered, the decision basically comes down to choice between the underlying trading platforms offered. The use of ‘white labels‘means that there is often actually a lot less difference between brokers then you may at first think. In many cases the choice of platform is often as simple as picking the one that offers the features that you want and you like the look of most.
Support
It can however be hard to gauge how effective a broker is with its support. The reputation of many brokers suffers at the hands of poor or disgruntled traders, simply because of the ease with which information, both true and manipulated can be spread on the internet these days.
Good support is however essential to your trading experience. As well as receiving good trading support, you also need good technical support and assistance from customer services when you have questions on your account. Timely withdrawals of your funds are essential as is the brokers ability to respond to your questions. In this area, regulated and established brokers tend to offer the best service as they have sufficient infrastructure to service their trading clientele wherever they are based around the globe.
Conclusion
So what makes the best binary options broker? Well the answer is the broker that interferes least with your trading process, allowing you to focus on the all important part of binary options… trading!
The key things to ensure are that your broker is regulated, offers good returns, accommodates your trading strategies and provides you with good support in the management of your account. You can check out our list of trusted binary options brokers that meet this criteria in order to find those that best align themselves to your personal trading requirements. Beyond this, the rest is down to you.