The first step towards successful binary option trading is finding a genuine broker, whom you can place trust on with your hard-earned money. The trading industry is extremely unregulated. Surprisingly, even some of the regulated brokers may not openly approve to your withdrawal requests. There are even scam trade alert companies, who will charge you significantly but not offer the necessary tool you actually need. It’s a jungle out there.
So, it is crucial to be cautious for signs of trading scams. If you cannot withdraw the winnings from your profitable trades then it is just waste of your time, money and sanity dealing with these professional crooks. Let’s learn how to avoid binary scams and be safe to consistently participate in the options market.
If the potential binary options broker shows any of the red flags given below then look for another broker.
Research is the foundation to select a good company. When you cannot find the company name on a one of the regulatory bodies websites, move on.
Red flag – How can you trust a company that operates a website anonymously? You cannot trust a total stranger with your money. Don’t set different rules online for what you would consider ridiculous offline.
Brokers claim that you will start earning huge profits as soon as you get registered. Just think, if making money trading options was actually so fast then hardly anyone would be sitting in their office and toiling. They would be sitting at the beach and reaping profits from trading binary options. Just think about it: If they could guarantee $1500 a week from a $250 investment, why don’t they just quit their job and do it…Actually, making winning trades consistently is hard but not impossible. Professionals also experience difficulty in constant winnings.
Red flag – It is not easy to make huge profits as brokers claim. The ones claiming must not be trusted.
Repeated trade exploitation
Several binary options trading brands have been caught exploiting their trading software and there are possibly some still doing it without their customer’s knowledge.
How trade exploitation works? – Assume you executed a call on silver with an expiry setting for 15 minutes. When you posted the expiry time, price of silver was above target price. Sadly, trade does not expire as planned but stays open for just a single minute. Trading marketplace fluctuates rapidly. In that single minute, the silver price collapsed below target. You suffered a loss in just a minute.
Can such thing happen? Can it be a software glitch? The answer can be both ‘Yes’ and ‘No’. It is like asking if it is possible that the steering and brakes of your car fails simultaneously, while driving downhill.
Red flag – If you find trades expiring late then detect it to be a binary scam– move to more reputable broker.
Customer service hard to reach
Customer service is valuable. Certainly, online trading process is easy in theory; deposit funds, choose a trade, determine the amount to wager and watch said trade expire. However, there are times when small problems arise, which need resolution. When no one offers support or the support reps stall for time then steer clear. Before making a deposit, it is necessary to send an email asking questions. It will help you evaluate their customer service.
Red flag – Some brokers string customer along with a promise to answer and resolve things that fall short to materialise. It is a shady stunt, so avoid such broker.