With the growing number of binary options scams and people losing money, several countries have banned binary options trading.
Binary Options Advisory: Tips To Choose The Right Binary Options Trading Platform
Australia is the most recent one to ban it after over 80 percent of retail clients suffered losses in binary options in 2017 and 2019. The ban on binary options in Australia came into effect on May 3rd, 2021.
By nature, binary options trading has always been risky since investors decide whether an asset will reach a determined value before it expires.
It’s more like gambling or betting, in essence. The risky nature combined with the inexperience of a new trader is a fatal combination that might open the doors for scammers.
Here are some tips that will help you pick a credible and genuine binary options trading platform for you to dabble in.
Check the Registration Status of the Broker
All of the emphasis in the world is still not enough to stress how important it’s to avoid unregistered brokers when it comes to binary options trading.
Nearly every binary options trading scam had an unregulated broker involved.
Do not mistake a license for registration! A license to broker trading is easy to obtain while regulation is not. Your broker might show you their broker’s license to prove their credibility, but that doesn’t mean anything.
Go a step ahead and use the CFTC website to check if the broker is regulated. Regulated brokers are required to follow a specific code of ethics, which makes them reliable and trustworthy.
If you have already lost some money to one such shady broker, consider it a lesson learned. On the bright side, there are binary options recovery services, which bring years of expertise to help victims collect evidence, pursue their case, and get their money back.
Research the Credibility and Past Records of the Broker
A Binary Options trader is as good as their past record and experience. The longer a platform has been in the business, the more reliable and trustworthy they are.
Experts recommend choosing a broker who has at least five years of experience in this field.
That is because a broker who has sustained for a long time in a high-risk field like this with a considerable user base indicates the trust and satisfaction of its clients.
Choosing a broker who has only been in the field for a few months or a year is akin to handing over your money to them yourself.
Apart from the credibility and experience of the broker, their history is also a critical factor to consider. If the broker has had a chequered past, it’s best advised to give them a wide berth.
SEC has a handy tool called the Investment Adviser Public Disclosure website, which lets traders run a background check on any broker.
Go Through the Terms and Conditions of the Broker
Have you ever come across long terms and conditions page online and skipped ahead to tick on I accept and move forward? Do not, we repeat, do not do that when you are signing up on a binary options trading platform.
Shady and fraud brokers are aware that many don’t bother to read this page and use it to their advantage. Usually, such brokers enter clauses and conditions in the fine print, turning the tide in their favor when caught.
Does the Broker Offer Trading Tools and Demo Account
Brokers that genuinely care about their clients would want them to learn trading by trial. The main aim of such brokers is not to rake in profits at the expense of their clients but help them understand the tricks of the trade.
Pick trading platforms that offer essential trading tools like indices and live stocks currency data, among others.
These tools will help a new trader analyze the ups and downs of the market and make an informed decision. Therefore, always go with the broker that offers these tools to users.
Also, consider a broker that offers demo accounts to its users. These are pretty useful for new users that are still learning the tricks of the trade.
With a demo account, they can practice and gain trading experience without risking any actual money.
Check Out the Return, Payouts, Deposit, and Withdrawal Options
Before zeroing down on binary options brokers, check out their deposit and withdrawal limits. These are the set limits below which users cannot withdraw or deposit.
Check if a broker’s limits are manageable for you, and go for the one with a limit you’re comfortable with.
Lastly, the gospel truth of binary options trading is that traders are investing in binary options to get more return on their investment.
What will work in your favor is choosing a broker that offers higher returns and payouts. The general rule of thumb is not to opt for a broker with less than 60 percent to 80 percent returns and payout.
Conclusion
In a nutshell, binary options trading is not as dubious as it’s made out to be. Most scams and losses result from impulsive action by new traders and are usually a user error.
If you take your sweet time to do due diligence and research before you dive in, the chance is you will come out with more money than what you went in with.
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