Make Sure You Ask These 5 Simple Questions Before Choosing Your Binary Options Broker
I’ve got more in the pipeline for you on the Binary Options project…
But I want to get something off my chest first. And I need to be completely transparent with this before I talk to you in more detail about the things I’ve discovered.
In a few weeks time I’ll be showing you a Forex trading strategy I’ve tweaked, tested and customised for use with Binary Options…
But before I do, I want to be clear on two critical points.
Now you’ve probably heard me mention before that most of my trading methods are based on a Futures Pit strategies. That’s just how I learned to trade. Everything is nice and simple, all based on pure price action.
And the Pit Trader’s method I’ve adapted for use with Binary options is working beautifully.
But before we can look at that, here’s what you need to remember:
There are HUGE opportunities to make consistent profits from Binary Options trading. But only if…
- You can keep in mind Binary brokerages are businesses in their own right, accept they have an obligation to generate profits for their shareholders, but then conduct your trading operations in such a way it’s YOU walking away with the money instead of them.
- You can take the time and trouble to find – and do business with – only the most reputable, highest quality Binary Options brokers available.
So what are the implications here?
Well, I must stress there’s nothing to be fearful of. As with any business venture, you just need to go in with your eyes wide open and know where the angles and edges are.
Have you ever heard this old poker saying?
“If you’re sat at the table and don’t know who
the patsy is, it’s probably you”
You just need to step back and do a bit of strategic thinking…
Consider how the broker intends to make money from his clients. And once you know where the broker holds an edge, you can simply trade a strategy that sidesteps those areas and works the law of probability in your favour instead.
If you can do this, you’ll be letting other, less effective traders pay for your broker’s lunch.
So firstly, you must accept the broker – any broker – has tilted the table slightly in his favour to begin with. That’s simply how he makes his money. It’s now your job as a more sophisticated trader to neutralise the edge the broker has awarded himself, and then go further by swinging the odds firmly in your favour.
And you’ll be pleased to know that’s quite simple to do.
If you’re disciplined and have a trading trick or two up your sleeve (which I can show you) you’ll find regular, profitable Binary opportunities with ease.
And secondly, as far as the need for reputable and high quality brokerage goes… you must accept there are some downright shady operators out there.
There are certain low-grade organisations calling themselves brokerages that in reality are out for nothing more than a fast buck. And they have no scruples about ripping people off.
But it’s only the same little cycle we went through with Spot Forex brokers in the early days…
- The first pioneers offer a genuine and sincere service.
- Less scrupulous operators smell a quick payday and jump on the bandwagon.
- Issues with the bad guys hit critical mass and regulatory bodies step in to sort the good from bad.
We’re now in the early stages of regulation with Binary Options and I believe 2014 will be a year of huge growth. I think we’ll see them more widely recognised as an effective trading vehicle now we’ve got stable, trustworthy, regulated brokers already in place.
But as I said earlier, before we go deeper into trading Binary Options it was important I gave you an insight into how things currently stand.
I wanted you to know I’m well aware of the grubby end of the Brokerage business. And I wanted you to be sure I’ve got your back covered because in a few weeks time, I’ll be showing you exactly how you can put Binary Options to work for yourself. And not only that, I’ll recommend the best, most trustworthy and reliable broker for you to trade with.
Now, as I carried out my investigations into Binary Brokers, I gained access to the insights of an ex-employee (Mr. X) of one of the LOW END brokerages… one of those operating at the sharp end of the business.
His eye-opening information helped steer me straight into the arms of my preferred broker. So I thought I’d share these five big questions with you today…
With Mr. X’s guidance, this is what I asked of all the prospective Binary Options brokers I looked at:
1) Are they trustworthy?
Most Binary brokers serving the European market are based in Cyprus – do they hold a CySEC (Cyprus Securities and Exchange Commission) license?
Before you place large trading funds on deposit, make a couple of test withdrawals/re-deposits with small amounts. Did you receive your money in a timely manner? Was there any stalling or excuses about delays in making payment?
2) Is their trading platform stable and reliable?
Is the pricing on their platform accurate to the pricing on your spot Forex charts? Is there any sign of them shading or skewing price extremes in their favour? Can you navigate their trading platform easily to get your trades placed quickly or is designed to be deliberately slow and clumsy – an obstacle to the trader’s success?
3) Can you compete on their playing field?
Different brokers offer different payout rates. Make sure the math’s can work for you… an 80% payout (where a £50 trade returns £90) can be a license for you to print money. A 60% payout means you’d need to win 63% of your trades JUST TO BREAK EVEN – a completely different proposition.
Also bear in mind the broker will promote the trade types that make him the most money i.e. the ones that traders lose most with. Remember we’ll be forging our own path, trading only the situations where probability has flipped over in our favour.
4) Can you get to your money?
Make sure there are no sneaky clauses making withdrawing your winnings a long process. Give thought to the means of payment you first use to fund your account – that’s going to be the easiest and quickest location to make withdrawals to.
Give VERY CAREFUL consideration before accepting any deposit ‘bonus’ the broker offers. Although not to be dismissed in their own right, they’ll always come with strings attached (usually affecting the point at which you can withdraw your funds). And again, go into this with a reality based mindset… NO ONE gives away free money, free iPads or whatever without there being a very good reason. Make sure you know the terms and conditions before you accept their offer.
5) Can you talk to someone if you have a problem?
There will always be occasions when you need help – even from a top-drawer broker. Make sure you’re getting fast responses from online chat and/or email support before you really need it. Send them a few daft questions just to gauge their response.
Personally, I want to see a phone number for any broker I deal with. Test that number from time to time to make sure it’s answered by people who can deal with your query – not some generic outsourced call centre.
So once you’ve done a bit of digging around you’ll soon get a feel for who’s to be trusted. And don’t forget – if you are interested in exploring Binary Options with me in 2014 I’ll be giving you a direct Broker recommendation anyway. I’ll be bringing you that update very soon.
Be Prepared: Market Moving Data Coming This Week (London Time):
Wednesday 18th December:
09:00 DE German Business Climate Index EUR
09:30 UK Claimant Count Change GBP
09:30 UK MPE Minutes GBP
19:00 US FOMC Statement USD
19:30 US Bernanke Speaks USD
Thursday 19th December:
09:30 UK Retail Sales GBP
13:30 US FOMC Fisher Speaks USD
13:30 US Initial Jobless Claims USD
15:00 US Existing Home Sales USD
Friday 20th December:
09:30 UK GDP GBP
13:30 US GDP USD
I hope you enjoyed this week’s issue. One other thing I’d like to look at as 2013 draws to a close is the ‘big-picture’ on some of the currency charts.
Do you have a particular Forex pair you’d like me to cover? I thought we could look at some key levels on the daily and weekly charts… stuff you might find useful as we go into the New Year.
Drop me a line and let me know.