Are Binary Options a Scam? While financial investment tools are not scams, some brokers, trading robots, and signal providers cannot be trusted due to their dishonest and unscrupulous practices.
The point is not to write off the concept of binary options based solely on a handful of dishonest brokers. The image of these financial instruments has suffered due to these operators. Still, regulators are slowly starting to prosecute and fine the offenders, and the industry is being cleaned up. These simple checks can help anyone avoid the scams:
Are Binary Options a Scam
- Marketing promises enormous returns. This is a clear warning sign. Binaries are a high-risk / high-reward tool – they are not a “make money online” scheme and should not be sold as such. Furthermore, operators making such claims are very likely to be untrustworthy.
- Know the broker. Some operators will ‘funnel’ new customers to a broker they partner with, so the person has no idea who their account is with. A trader should know the broker they are going to trade with! These funnels often fall into the “get rich quick” marketing discussed earlier.
- Cold Calls. Professional brokers will not make cold calls – they do not market themselves that way. However, cold calls will often be from unregulated brokers interested only in getting an initial deposit. Proceed extremely carefully if joining a company that got in contact this way. This would also include email contact – any form of communication out of the blue.
- Terms and Conditions. When taking a bonus or offer, read the full terms and conditions. Some will include locking in an initial deposit (in addition to the bonus funds) until a high volume of trades has been made. The first deposit is the trader’s cash – legitimate brokers would not claim it as theirs before trading. Some brokers also offer the option of canceling a bonus if it does not fit the trader’s needs.
- Do not let anyone trade for you. Avoid allowing any “account manager” to change for you. There is an apparent conflict of interest, but these employees of the broker will encourage traders to make large deposits and take more significant risks. Traders should not let anyone trade on their behalf.
Which Are The Best Trading Strategies? – Are Binary Options a Scam
Binary options trading strategies are unique to each trade. We have a strategy section, and there are ideas that traders can experiment with. Technical analysis is helpful to some traders, combined with charts and price action research. Money management is essential to ensure risk management is applied to all trading. Different styles will suit other traders, and strategies will evolve and change. Are Binary Options a Scam?
There is no single “best” strategy. Instead, traders must ask questions about their investing aims and risk appetite and then learn what works for them.
Are Binary Options Gambling? – Are Binary Options a Scam
This will depend entirely on the habits of the trader. Without strategy or research, any investment will win or lose based only on luck. Conversely, a trader making a well-researched trade will ensure they have done all they can to avoid relying on good fortune.
Binary options can be used to gamble, but they can also be used to make trades based on value and expected profits. So the answer to the question will come down to the trader.