Binary Options Trading Scams: How To Identify A Trading Scam
Binary options trading scams are all over the market today.
Newbies usually fall for them due to their ignorance.
Knowing the difference between a legitimate trading opportunity and a scam can be challenging.
In some cases, these fraudulent schemes can look and sound so convincing that you consider them to be legit companies. When you carry out some research, you will spot the binary options trading schemes that are legitimate and those that you need to ignore.
In this post; you will learn how to get the best out of your binary options trading experience.
We will achieve this by learning how to spot the difference between legitimate trading schemes and scammers. This will help you not to fall victim to binary options trading scams.
What Are Binary Options?
Binary options trading is one of the financial investments out there. Some view it as simpler than the physical and sale of stocks. Others see it as a gambling activity; and are thus, prone to scams.
These views, to some extent, are subjective.
People have different experiences with binary options trading. As a result, we don’t have a ‘correct’ interpretation of whether binary options trading is good, bad, safe, or risky. Having a better understanding of binary options will help you give the right answer (based on your view).
How Binary Options Trading Works
Binary options trading is straightforward for beginners. All you need is to follow the steps listed below.
Find a broker
This is an important decision that you will make when planning to trade binary options.
You need to choose the best binary options, broker. Such a broker must meet all your requirement and must also have what it takes to improve your trading performance.
With so many options out there, it may be daunting to choose the right binary options broker. While searching for a broker, use the points listed below to guide your search:
- Cost- Go for a broker with a competitive and transparent fee.
- Deposit- Choose a broker that offers low minimum deposits.
- Choose a broker that specializes in the asset that you are interested in trading.
- Regulation- The broker must be regulated by the relevant financial body such as CFTC, CySec, and FCA. Binary.com, 247 Binary Options, and IQ option are all regulated and are thus, safe.
- Platform- The broker must have an easy-to-use platform that offers all the charts and resources you need.
- Reliability- The customer support service of the broker must be reliable. Trading binary options with Etrade and 24 Option will give you access to top-notch support.
- Trading apps- Does the broker offer cross-platform capabilities? Will the charting tools that you need work on your device? Check these before settling for a broker.
- Demo accounts- Does the broker offer demo accounts? A demo account is the best place to make mistakes. It helps you learn binary options trading before using your real money. Ensure the broker you want to go for offers demo accounts.
Select an instrument
There are many instruments that you can trade in binary.
They include Forex, stocks, indices, and commodities.
You can bet on the price of natural gas or the stock price of Amazon. Go for an asset that you understand; one that offers good returns.
Choose an expiry date
If you are a short-term trader, you will probably be interested in 30 seconds, 1 minute, and the end-of-day expiry times. Ensure you balance the volume of binary options trading with the movement of price. Although more trades can give you the potential of making more profits, it’s advisable to place fewer and more accurate trades. You should also adhere to a time that compliments your style of trading.
Decide on size
Size matters in binary options trading. The higher your investment, the higher the possible returns. However, don’t forget that the whole of your investment is on the line. So, you need to utilize an effective money management system that will allow you to make sufficient trades while protecting your capital from being blown.
Select an option
There are many options that you can choose from.
When selecting an option, pay attention to factors that will affect your investment, and choose an option that increases your chance of succeeding.
Don’t choose an option because you want huge returns; instead, consider the relatively safe options.
Once you decide on the option you want to choose, check and confirm your trade. Then relax and wait for the outcome of the trade.
How Binary Options Trading Scams Work
Binary options trading scams in many ways, but they are similar in one way or the other.
You may receive a call from nowhere offering you a secure investment that has fast and high returns. It is also possible for you to see these scammers on online adverts or social media.
Binary options trading scammers usually have professional-looking websites that make them look legitimate.
The websites often have a login process, personalized account details, and a trading platform.
The scammers will lure the victim into investing money into the account. So, it’s either the victim or an agent who tries to guess the price movement of a particular commodity over short intervals.
If the guess is right, the victim’s account will be credited with a small return. If the guess is wrong, the whole amount placed will be lost. The odds are against you so the probability of losing overtime is high.
When you try to withdraw your money, you find it impossible and end up losing the whole investment.
Binary options trading scammers usually request personal information.
They claim that they request this information to transfer your money. If you give them this information, you will be prone to identity theft.
How To Protect Yourself From Binary Options Trading Scams
The first thing you need to do to protect yourself from binary options trading scams is to know the restrictions that a particular broker offers.
- Can you trade with leverage?
- Do you have the opportunity to trade as much or as little as you want?
- What payout options are offered by the broker?
- How quickly can you deposit and withdraw your money?
- Can you place trades on your mobile device?
- Can you trade from anywhere?
- Is the platform easy to use?
- Will you incur additional commissions and fees?
- What are the reviews of other traders about the broker?
Answering these questions will help you know if a particular broker is legitimate or a scam.
It is important to check the customer support of the broker you intend to use.
Ensure the customer support is superior to what you get from the bank.
You need to have unrestricted access to customer service agents. They must also offer fast ways to contact them like a live chat screen and a phone line.
Know how quickly you can get an answer to your inquiry.
It is also important to find out if the customer support team is efficient, helpful, and friendly. The last thing you want, when you have issues with your trade, is an unresponsive broker that will compound your problems.
Legitimate brokers will help you solve your problem and also save you money.
Don’t let anyone push you into making uninformed decisions about investments or money. It’s better to get independent financial advice.
Finally, pay attention to who you give your personal information (such as your passport and bank account details). Scammers use these details for identity theft.
Have you been a victim of binary options trading scams before?
Share your experience with us in the comment section below.