Trading with binary options is without question one of the most easily understandable ways in which to speculate on price movements in the financial markets. Each trading contract only requires the trader to make a simple directional choice as to whether the expected price action will take the asset price either higher or lower. This makes it a simple medium for those who are new to investment to use and one with which they can control their risks. The only financial risk that you take when placing a contract is fixed from the outset and limited to the money that is invested on the contract. This makes it relatively easy to construct an effective money management plan for any strategies used.
In fact the only difficult decision for a new trader is in knowing which broker to choose for their trading. There are a number of brokers on the market who deal in digital binary contracts and the new trader can often be confused as to the differences in the services that they provide. The truth is that there is often little difference between many of these brokerage companies. However it is important to be aware of the subtle differences so that you can find a company that will allow you to maximise your potential for trading success.
Here is a list of some of the criteria that you should consider when you look to set yourself up with an account to trade with digital options.
The Contract Returns
This is the main thing that most traders will focus on and of course, it is vital that you get the best return for any trading positions that you take. Nearly all brokers payout over 70% for a successful in-the-money contract, although the exact amount that they offer can vary. The very top paying brokers often payout their traders over 90%. This is a significant difference and will certainly impact on the profitability of your trading over time. Therefore it is worth checking the rates that are offered, in particular on markets that you intend to trade, prior to opening an account.
In addition to looking at what you will receive for a successful in-the-money-contract you should also consider what you will be credited for any that finishes out-of-the-money. Not all brokers offer this facility, but those that do will credit you a set percentage of the initial contract investment, if even your prediction proves incorrect. This can see a refund of anywhere between 5-15% per contract. Many new traders in particular like this feature at it helps to provide a safety net to their trading when first starting out.
To run your account you will need to observe the brokers rules for depositing and withdrawing from your account. Check the deposit methods that are offered and look to see if there are any stipulations as to how and when you can withdraw your funds. Most brokers allow only one free withdrawal per month with subsequent requests attracting a processing fee. Higher level account holders may get access to same day withdrawals. This is something worth considering if you expect to need easy access to your funds.
Indicators And Resources
If you don't have access to your own charting package and trading tools then it will be important to find a broker that provides them. Most binary options brokers will provide some basic resources for the new trader which may prove sufficient when first starting out. It is also like that you will receive daily and weekly market updates which you can make use of to keep up with the latest market developments. These can also be used to form the basis for your own analysis.
Finally be sure to take a look at the reputation of the broker. Online reviews and discussion in forms can be used to find out how other traders have found them and what they like and dislike about their services. This can prove useful when it comes to making your decision. You may also find additional information about the binary options broker that can help you to make your final decision.