How to choose a broker

How to choose a brokerEspecially for newcomer, the perfect binary options broker often seems to be difficult to find. In a market with thousands of competitors and equally numerous different business models, it can be hard to find reliable criteria to separate good offers from bad offers. Learn all in our article How to choose a broker here.

To make things easier for you, we have created a complete guide on how to choose a broker.

The Best Binary Options Brokers

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24option logo5 stars
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How to choose a broker – Finding the right match

Factor #1: Regulated or not?

As with any other financial decision, choosing a broker means trusting someone else with your money – in the case of your broker that is potentially a lot of money. To keep your money safe, you should think this type of decision should through. Find out how to choose a broker here:

The worst thing that can happen to you is that your broker has to file for bankruptcy. Depending on which broker you signed up with, a bankruptcy could potentially mean that you lose all the money you had deposited with the broker.

There is, however, a way to prevent such a disaster: When you register with a broker that is regulated by the European Union, your money is safe. Those brokers have to keep separate accounts with enough money to pay out all their customers if they go broke. The EU will make sure that the broker obeys these rules and that you get your money back if your broker should go broke.

Over the last years, the number of EU-regulated brokers has grown steadily, which means that you can easily find the right broker for you. If this point is important to you, you should make the EU-regulated batch the first criteria in search for a broker.

There are plenty of EU regulated brokers out there. If this point is important to you, it should be easy to find one. There are, however, trustworthy brokers that are not EU regulated. To make your decision easier, we created a list of trustworthy brokers.

Factor #2: High payouts for your favorite binary option type

Payouts determine how much money you make with every binary option that you win. With an 80-percent payout, for example, you would win 80 percent of your investment if your prediction is correct.

Binary options brokers all offer slightly different payouts. Almost always, one broker offers better payouts in a certain market environment and a different broker offers better payouts in another market environment. While our tests can help you to find the brokers that offer generally high average payouts, finding the perfect broker for you might has to involve some testing on your part.

Even the slightest difference in payouts makes a big difference. While a 2-percent higher payout might look benign at first, over the time of a trading career, two percent make a huge difference. Assuming 6 trades a day, 20 trading days a month, and a winning percentage of 70 percent, a 2-percent higher payout only needs 6 months to translate into an additional gain of 2,160,163%.

Using the power of compound interest, a small extra payout can net you an additional profit of more than 2 million percent – without you having to do anything for it. Considering the fact that you probably plan to trade for more than 6 months, your additional profits would be even higher.

To avoid missing out on the money, make sure to check the payouts your broker gives you thoroughly. Compare them with a few other brokers and take the best offer. An Excel sheet can help you to keep track of your average payouts over a long period of time.

Factor #3: Assets in the right time zone

Thanks to their rapidly growing popularity, binary options are now traded by traders worldwide. Due to the different time zones these traders live in, they trade a very different times during the day.

For currencies and commodities, this is no problem. Both types of assets can be traded during the entire day, thereby enabling traders to invest in currencies and commodities whenever they like. With stocks and indices, however, things are different.

Stocks and indices are traded at their home stock exchange. These stock exchanges have opening and closing times, and when their markets are closed, you can’t invest in their assets. Most stock exchanges open from around 9 AM to 5 PM of their local time zone. If you live on the side of earth, this might be the time you are asleep.

If you plan to invest in stocks and indices, you have to make sure that your broker offers enough assets from your ideal time zone for you to execute your strategy. Traders from America might want to trade in the morning, which means that they should choose a broker that offers European stocks and indices. If they want to trade in the evening, they should choose a broker that offers Asian stocks and indices, and if they want to trade during the day, they should choose a broker that offers American stocks.

How to choose a broker
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