August 26, 2014
Recently, Markets World announced that they would be improving their payouts system, such that 70% would be the new minimum payout, while 100% would be the new maximum. Along with their recent addition of 60-second options, the idea of course is to obtain and maintain new customer’s that might be attracted by these features. This is the email that was sent:
I was with Markets World back when they had the offshore broker industry’s highest payouts at a flat 95% among all assets back in 2012. After attracting the initial customer base, they ventured to lower their payout into the 85%-93% range, which was still largely the best in the offshore binaries industry.
After some time, I stopped using Markets World on the basis that the trade fills tended to lag significantly at times and caused multiple losing trades that would have won had I been able to obtain my desired entry point. Others reported the same, and I simply couldn’t be content with trading with a broker that isn’t permitting fair points of trade entry. I always like to emphasize that the entry point in binary options is essential because the trades are so short in duration, and hence wins and losses are determined by very small margins, often by less than one pip. I just couldn’t live with that so I went elsewhere. Still, in terms of offering a free no-strings-attached demo account and quick withdrawals, it was top-notch. But ultimately I decided to move on.
At some point, they went to the variable payout system, where the flat XX% was no longer offered. Instead, the payout varied continually based on an algorithmic type of formula built into the platform. Payouts could often be as low as 60-some percent based on my observations, which to me simply isn’t worth it. (I’m not sure if they ventured in the 50-some percent range, but payouts have been that bad on other platforms for specific assets during certain times of the day.)
Does the new system make it worth it considering the payouts may be a bit more favorable on average?
It really depends on one’s own preferences here. I could never use a variable payout structure given that I feel much more at ease when I know exactly what I’ll be receiving should I win a trade. I look for assets that obtain 85%, which is about the best out there for fixed-payout offshore brokers. At least in terms of a payout that reliably holds over the European and New York markets sessions. If you’re getting 70-some percent or low-80’s most of the time, I simply feel it cuts into the profit margin too far.
Especially for a beginner, obtaining a healthy 85% payout is advisable, as it offers a break-even win percentage of 54.05% – i.e., you need to win about 54% of your trades just to break even. If you’re getting 70-some percent, that necessitates winning 60% of your trades, which is difficult to do consistently even for good traders. The skill level required to even go up by a couple percentage points over a large series of trades is quite large. For those who understand baseball, it’s like the difference between a .290 hitter and a .310 hitter. The former should be able to carve out a decent career for himself and make a reasonable salary. But a consistent .310 hitter will have a strong case for a Hall of Fame career. And what’s the difference? The .290 batter gets a hit in 29% of his at-bats, while the .310 batter obtains a hit in 31% of his at-bats. Doesn’t seem like much on the surface, but it’s significant. Obtaining 70% payouts necessitates nearly a 5% increase in overall winning percentage over 85% payouts, which is huge. Not to mention a highly reduced profit margin.
Granted, some trades you will find that you’re actually making in the high-80’s or even 90’s in terms of payout percentage. But more often than not, you’re likely going to still be getting into most of your trades at these lower payouts. Again, for me personally, I prefer the fixed payouts, given the added comfort of knowing exactly what you’re receiving. I like things to be predictable and consistent when it comes to trading, and most people feel this way. In trading there is enough uncertainty the way it is – how you’ll perform, what amount of money you’ll win or lose, will trades set up accordingly, how many good set-ups will there truly be, etc. Adding uncertainty with respect to the payout just isn’t something I’d be keen to deal with on top of everything else.
Markets World does offer many quality features – including a free demo account, which can be handy for testing out strategies and getting a feel for trading, and very fast withdrawals (many were processed the same day and received the next). Withdrawal speeds do seem to vary from person to person, but most will attest to Markets World’s punctuality in this regard.
But for me, I always know what I’m receiving with the fixed payout scheme, and won’t be subject to the whims of a unreliable trade filling platform and not knowing what kind of payout I’ll be receiving on each trade. So while it may be an upgrade certainly in some respect, the payouts largely won’t be any better than industry average at best, but might be enough to allow some to give them a try or return back to their platform.