How to Avoid Scam in Binary Options Industry
How to Avoid Scam in Binary Options Industry?
Thanks to the popularity of binary options trading, number of binary options broker is increasing. Sometimes it can be pretty challenging to spot a scam broker among so many trustworthy ones. This is why we advise our readers to wisely choose preferred binary broker in order to have a successful binary options experience with high winning ratio. For new traders in binary options industry, it is especially important to spot possible scam brokers and to avoid such possible outcome, company CySec was established.
CySec (Cyprus Security and Exchange Commision) is a financial regulatory company that offers a minimum set of standards for binary brokers to follow. Nowadays, we can divide brokers, whether they are regulated and have CySec licence or are they unregulated. CySec licence isn’t 100% guarantee that a particular broker is trustworthy but it does mean that most likely it is, because such brokers to have to follow and apply certain rules that are in accordance with EU laws.
In industry where financial speculation is present, short term trading can be riskier than in long term. Sometimes, traders beginners make a beginner’s mistake and invest larger amounts of money without any strategy and then, unfortunately do not reach desired binary option results.
We believe that this article may be of great help in order to improve transparency in binary options trading. It is only necessary for traders to be more informed about trends in financial market and to choose a reliable binary options broker. Afterwards, with time, traders can be more more experienced and with wisely chosen strategy and trading instruments, will maximize their profit.
As mentioned above in the article, regulation of particular broker can be significant while trader is still in process of choosing the right broker for himself. There is as large number of unregulated brokers, who are reliable and offer a secure trading platform with a wide range of tools and service for a successful trading process. But here, in this article, we will emphasize more on some cases where scam brokers take advantage and cheat their traders .
Here is the list of several tips that might be very useful for traders to avoid scam in binary options industry.
Downplaying Risk Level in Binary Options
As mentioned above, some binary brokers deceive their traders by telling them there is absolutely no risk in binary options trading. Since this is an online type of investment. it is based on the assessment will the price of the chosen asset rise or will it fall.
Reliable brokers wouldn’t downplay the potential risk since it is clear how it is possible to lose money. This practice is mostly used by scam brokers who try to deceive uninformed traders. It is always a good practice never hide risk level. Another false information is when scam brokers try to convince the traders about false money return, such as 100%. Some brokers do offer such high payouts, but traders have to read terms & conditions in order to see if they have a trustworthy broker or a scam one.
In general, trading binary options isn’t difficult, but traders should probably invest their time in better understanding of the financial market and to improve their trading skills. For this reason, it is advised to read as much possible broker’s reviews and gather more relevant information in order to see if a particular broker offers unrealistic promises in binary options trading.
Violation of Privacy in Binary Options Scams
Some traders have bad experiences in doing business with scam brokers. One of the reasons may be the fact that such brokers do not maintain the confidentiality of their registered traders. These type of scams can happen through telephone or email. This behaviour can reflect badly on binary options industry because majority of brokers are reliable and are do not cheat their traders by stealing their personal data.
When traders register with a particular broker, they expect that their personal info will be protected and not pass on further to the third party. Let’s say, someone contact you and you don’t know where they got your phone number or email-. This is considered to be very dangerous and a violation of privacy, especially if your data are not public information. There can also be a similar possibility of privacy breach. Some scam brokers tend to buy stolen database and afterwards, they contact traders worldwide.
Refusal of Proceeding Payment
This type of fraud is considered to be the worst fraud in binary options trading. Sometimes, traders don’t understand entire trading procedure but it all clarifies after several documentation are verified. ID verification is important element of secure binary options trading because it shows they are subject to the significant regulations in this type of online industry.
So this in only misunderstanding, but the real problem is when scam brokers refuse to proceed with withdrawal. In such cases, these brokers do not respond to the calls or they don’t even return emails. This is a typical example of scam in binary options trading.
Even worse scenario is when they answer trader by asking him to deposit more money, without the initial payment. To be able to avoid such fraud, it is advised to read reviews of different binary options brokers in the market, but also on forums, different experiences of other traders to have a more clearer picture. This way, it will be easier to determine how to choose a binary options broker and to have a positive and profitable binary options experience.
Bonus Scam in Binary Options trading
Majority binary brokers offer their traders a possibility to earn more money in safe binary trading. This means that on their trading platform they offer a wide range of different trading tools and services, and that also includes a variety of bonuses.
Bonuses can vary from welcome bonus (for new traders who register on the platform) all the way to the unlimited bonuses. Those bonuses can be very attractive to traders worldwide so this is why it is wise to read thoroughly terms & conditions for the bonus policy. By doing that, traders will minimize potential risk of being a victim of a scam broker.
Since 2008, when binary options trading appeared on the financial market. more people worldwide became interested in this new type of online investment. Due to its increasing popularity, there is a large number of binary options brokers and some of them are scam.
For this reason, we decided to write an article to clarify more how to distinguish reliable brokers from scam ones. Above mentioned 4 reasons are the main categories by which traders can see if a broker might be scam. We recommend you, our readers, to gather as much possible information regarding topics that interest you the most (from how to choose a reliable broker. choose the right strategy or how to make money with binary options ) to have a whole picture. We hope that these guidelines will assist you while trading binary options.
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