Binary broker test questions and answers

Either way, it would cost you a lot of money. Testing your binary options strategy is your first step to becoming a successful trader. It can save you from unnecessary losses and make you more money — there is no good reason to forgo testing. The most important value of your binary options strategy is the winning expectancy. Testing your binary options strategy means determining your winning expectancy and, if necessary, improving it to a point where your strategy makes you money.

Your winning expectancy is the product of your winning percentage and average total return per winning trade. That might sound complicated but is really easy. Assume that a strategy wins you 65 percent of your trades. You get an average payout of 70 percent, which means that you get an average total return of percent on every winning trade — you get your investment back percent plus your payout 70 percent which nets you a total return of percent. To calculate your winning expectancy, all you have to do is calculate percent of 60 percent.

The result is percent. The important thing to understand is that the winning expectancy can tell you only whether you will make money with a strategy. It is highly individual value and a bad indicator for comparing strategies between traders. Every trader is different. They prefer different trading styles, they tolerate risks differently, and they have different strengths.

One trader might do better with a strategy based on numbers such as values of technical indicators; another trader might prefer a strategy based on pattern recognition, for example trend analysis or candlestick formations. If another trader achieves a high winning expectancy with a strategy, this does not necessarily translate well to you. You might lose money with the same strategy.

This test necessarily requires a high number of trades. A test based on only 10 or 15 trades is inconclusive because there is a lot of room for variance and coincidence. You need at least 50, or better , trades. We recommend doing these things in an Excel file.

It can automate all calculations, and you can more easily reevaluate the data later. It also makes sense to keep collecting this data after your initial test.

It will help you to monitor your success and recognize mistakes before they cost you money. The most important tool for testing your binary options strategy is a demo account. For traders, a free demo account makes a lot of sense. Brokers should also be proud to show off their platform and customer service, so traders should be able to use a demo account without deposit and with a simple sign up process.

Likewise, as a prospective binary options trader, the demo account gives you the opportunity to put the platform to the test. Can you make sense of it? Does it feel right? These are the questions you need answers to before you hand over your cash. Here, we take a close look at binary options demo accounts; how they can help you and what to look for as you decide whether to move on from the demo to the real deal….

Losses and gains are credited to this virtual, dummy balance. So is it always safe to sign up? At the very least, the process tends to involve submitting your email address and specifying a user name.

What can you glean from independent reviews of the site? Where is it based? What do actual users have to say about it? Be especially wary if the demo sign-up process takes the form of a data-mining exercise — i. At heart, binary options demo accounts provide the chance to test-drive the platform. So here are the areas to focus on as you put the platform through its paces….

As such, it should ideally be fully representative of the live platform in terms of access to all features. This is useful both for the novice trader, but also for more experienced users looking to ensure they are trading with the best provider. It is of course, possible to have accounts with different brokers to ensure the best payouts on specific assets and trades. The idea behind most demo accounts is that you see the results of your simulated trading activity reflected in your virtual balance.

Likewise, if the live account features a returns slider, that slider should work in exactly the same way on the demo as on the real thing. As a novice in this area, you may be weighing up binary options alongside other forms of trading.

As well as reading around the subject, signing up to no-deposit binary options demo accounts can be a useful method of hands-on research. Binary options demo accounts provide a risk-free environment to explore new areas. From indices through to commodities and individual shares, the demo should ideally provide access to all assets available on the live version, giving you scope to experiment.