You have just signed up for a binary options trading account and now you are ready to learn. Your broker offers an education section, but when you check it out, all you find are a couple of videos which basically are just another sell on the trading platform. You call up your account manager to ask about one-on-one training, but either it is not offered or the “expert” trader you are assigned seems to be anything but proficient.
Or, they need you to make a bigger deposit in order to access the next level of customer service…
What should you do? Where should you go to learn more about binary options? Do you even need a trading education?
Truth About Binary Options Brokers And Education
A Lot of Brokers Do Not Offer a Real Education
You may know from reading my articles that lately I have been frustrated by the state of binary options trading. The industry has been taking a lot of flak, arguably rightfully, around the globe. Regulators are cracking down on binary trading and are making it difficult for traders and brokers to conduct business in many countries.
This is one of the main reasons I now recommend Nadex above all other trading sites. Not only is Nadex one of the best brokers out there, but it is a totally legit trading site for US and international traders.
There are a number of other binary options sites which we recommend as well. But you probably know that for every broker we recommend, we urge you to steer clear of about a dozen.
There are a lot of reasons for this, but one of those reasons is education.
A huge percentage of binary trading sites offer zero education. A couple of videos giving you a platform tour does not really qualify as a learning resource.
But another issue comes in the form of trading sites which claim they do offer comprehensive training programs, but cannot deliver on the promise.
Worst of all are brokers who pretend their staff possess experience and credentials which are entirely fictitious. This is a common calls center tactic among scammers. The person who answers the phone tell you that he or she has years of experience trading, but in reality you are speaking to someone who has only one area of expertise: sales. Personnel like this cannot educate you—they can only persuade you to trade and lose money.
Needless to say, shady practices like these are one of the reasons why regulators are so fed up with the industry as a whole. We are fed up with these practices too, which is why we blacklist so many brokers. If you do suspect you are dealing with a company that is lying to you about the education they can provide you with, we suggest that you get your money out of your account and go elsewhere.
So how can you educate yourself, assuming you find a broker worth trading with? These are the three steps we recommend:
1. Choose a broker who offers a real education.
2. Educate yourself through third party courses, websites, and books.
3. Conduct your own testing.
Now I want to talk about each of these in more detail.
1. Choose a broker that offers a real education.
The first thing you can do is pick a broker who can actually offer a real education. This can be a bit tricky for the reasons I have already discussed; a lot of brokers who say they offer an education really do not.
So how do you recognize quality?
First of all, here are a few red flags:
Brokers with an “educational center” which is empty or nearly so. In some cases this happens when a broker is new and still establishing a site, but in other cases there is never any intention of providing resources. The page is there to make the site look more professional, and for no other reason.
Vague talk. A lot of brokers mention “training programs” on their sites as benefits for depositing more money, but if you ask their customer service agents to describe the programs and what they teach in detail, you do not get a clear answer.
Inconsistency. If a broker lists certain account tier benefits on one page and different benefits for the same tier on another, it is hard to say what they really provide.
Sales posing as education. If a “trading expert” gives you a hard-sell on opening an account, depositing more money, or placing a trade, that person is a sales agent, not an educator.
Quality training resources are:
Specific and clearly established. If you ask what type of training you will get, someone can actually tell you specific strategies you will learn about and teaching methods that will be used.
Focused on strategy, not wholly on the platform. A few resources on using the trading site are good, but they should not comprise the entire educational section. You are looking for videos and articles that teach trading methods.
Never a hard-sell. Nobody should ever pressure you into making a larger deposit or taking any specific trade. If anything, your trainer should be helping you to establish trust in your own trading methods and managing your money responsibly. Good training leans toward a conservative approach.
If someone tells you they have specific credentials, they should be able to provide you with proof.
Wondering what Nadex offers traders in terms of education?
Nadex offers a series of courses exploring the site itself, binary options trading, strategies for trading, and an explanation of how spreads work.
The videos focus largely on how to use Nadex. While I would prefer to see more videos dedicated to strategy, I can actually understand Nadex focusing on the platform. Why? The Nadex platform is a little more complex than most, and watching videos actually is incredibly helpful when it comes to learning the ropes.
Trade examples are an interesting offering in the Nadex educational center. These are examples of real-life trades which have been placed on Nadex. This is an innovative teaching method I have not seen on any other binary sites. For those who learn by example, this section could shed a lot of light.
Nadex offers webinars that teach strategy—this is where their educational section really shines.
Honestly, I do feel like Nadex could offer more, but this educational section is still more complete than most of what you will find out there.
Most importantly, you can trust Nadex because it is regulated by the CFTC, one of the toughest regulatory bodies on the planet. So if someone at Nadex who is helping you out tells you he or she is a trading expert and provides you with a resume of past experience, you can actually trust that expertise. You are not going to find yourself dealing with sales representatives with fictitious trading backgrounds at Nadex.
2. Educate yourself through third-party courses, websites, and books.
While I have said that Nadex’s educational resources could be more thorough, that is true of every binary options broker on the planet. And that is understandable. Their primary business after all is to offer you a secure trading platform and the chance to participate in the markets. They are not full-time educators.
For that reason, you should only ever view your broker’s trading resources as the first step in your educational journey.
What do you do after you have watched all the videos and webinars that your broker offers?
Head to your local library and check out books on trading and the markets. Soak up all the knowledge you can.
Buy eBooks that teach strategies you are interested in. Look for free eBooks to download as well; there are plenty of them.
Consider signing up for a training program offered through a third party. There are tons of courses for traders out there. A lot of them are expensive, but still a great investment. There are scams out there too, though, so do your research before you select a course.
Take advantage of free resources offered by paid trainers. Oftentimes people who offer paid courses also provide a lot of free materials to traders.
Get on forums. This is where you will probably find the greatest educational wealth. Traders love to share their methods, get feedback on trades, and provide assistance to others online. The connections you make can pay off in the future in ways you cannot even imagine now.
Use your charts. When it comes to learning technical analysis, nothing beats real-life examples. Do not just read about an indicator and move on. If the indicator seems like something you might want to use, load it onto some historical charts, scroll back in time, and then move forward circling strong examples. Eventually you will put the pieces together when you test trading strategies that use those indicators.
My main advice here is to take a broad approach to your education and your view of trading. I do not mean you should not focus on specific strategies, just that you should not see yourself only as a “binary options trader.” Instead, just think of yourself as a trader.
Why? If you are looking only at binary trading resources, you are going to miss out on a lot of great materials.
The reality is that the markets have a lot in common across the board. While binary options trading requires a slightly different approach than Forex and Forex requires a different approach than stocks and so on, quite often a single strategy can be tweaked to work for any or all of them.
Plus, I think all too often, binary options traders are coaxed into believing that binary trading is somehow “easier” than other types of trading.
This is because binary options platforms are typically designed to be easy to use. But there is a difference between a platform being easy to use and trading strategies being easy to implement.
If you focus on trading as a whole and not on binary options, you will get away from the mindset that “all you have to do is click High or Low!” You will focus on strategies and the hard work of learning to trade profitably.
You will open up doors and learn techniques you might otherwise have overlooked simply because they are being promoted as strategies for a different type of trading.
You will also learn about adapting strategies for different types of trading, and you may end up doing not just binary options trading, but stocks or FX or other forms of trading as well.
3. Conduct your own testing.
This is something I cannot emphasize enough. It seems like a lot of traders equate education with “book learning” or watching videos. But education eventually needs to take a hands-on form. Most of your learning will take place in the realm of application, not theory.
Once you have the basics down, it is time to start testing real strategies. There are several things you can do here:
Pick various strategies that interest you and walk through the steps with hypothetical trades. Look for a few trade setups on old charts and see if you can understand how they would work. Do not get too in-depth yet; just start getting a feel for what you like and what you want to avoid.
When you find a couple strategies you think you might really like, conduct backtesting. This means scrolling through historical charts one bar at a time as if you were trading in real-time, looking for trade setups. When you find a setup, make a decision about whether you would trade or not if you saw that setup in real life. Then move the chart forward a bar at a time to find out what would have happened. Take careful notes. Learn to recognize strong setups.
Demo test! After you start getting great results with backtesting, you can demo test your strategies in real-time on your binary options trading platform.
Demo testing is a wonderful opportunity to learn and practice without risking money. The ultimate education is the one you get through actually trading, and this is how you do it without going broke.
Not every binary options broker offers demo testing, but Nadex does. In fact, where a lot of brokers limit their demo accounts to just a few weeks of use, Nadex gives you a free demo account you can use forever. That means anytime you want to hone your game and learn more through testing, you can do it. I would argue that this is actually the ultimate educational resource Nadex provides.
Design Your Own Binary Options Training Program By Pooling Resources
Assuming you have picked a high-quality broker like Nadex, you have a great starting point in your educational journey. But it only begins with the articles, videos, and webinars offered by your broker. From there, you need to plot your own course by pooling together outside resources. Finally, you need to learn by doing, and that means conducting a lot of testing.
Really, education in binary options trading is an ongoing adventure. Even after you have been trading profitably for years, you will continue to read and test and explore, sharpening your edge. Dive into that adventure with enthusiasm and you will learn to recognize high-quality resources. Over time, you will get better and better not only at trading, but at learning itself!