How to avoid binary options scams
Not too long ago, binary options trading was an entirely new concept. But this is not the case now. Out of nowhere, binary options brokers emerged and started carrying out extensive marketing campaigns promoting their services. The section of individuals these brokers’ advertisements target are retail traders.As is with everything involving money, cases of binary options scams have been on the rise.
But who is a retail trader?
Retail traders are individuals who trade on financial products despite not being professionals. Ideally, a retail trader has no substantial knowledge or experience when dealing with financial products, making him/her a newbie in binary trading.
Most retail traders venturing into trading binary options come with high hopes and expectations. The marketing strategies in use by most binary options brokers convey a message of being able to profit fast. Such strategies deceive traders that trading in binaries is easy and needs no previous experience. Binary options trading is profitable but not easy, and this is what retail traders aren’t told.
How to Avoid Binary Options Scams
The binary options trade is littered with tons of scammers. As a novice trader, trusting anyone in the industry can come with a hefty price since the scammers can take the form of a broker or another trader. What this means is that most of the times, the odds are stacked against the trader. The only way a trader can make sure that they don’t fall victim of these scammers, is finding as much information about a binary options broker. Since getting a broker’s details may not be enough, we are going to discuss other options available to a trader.
Trade with Regulated Binary Brokers
Before you can set up an account with a binary options brokerage firm, the first thing a trader has to do is ensuring that the broker they are about to use is regulated. Trading with regulated brokers ensures that a trader can withdraw funds from the account they have set up with ease.
All regulated brokers are issued with a license from a regulatory authority. If you are about to sign up at a binary options brokerage firm and you notice that the broker does not have a license, chances are that you are dealing with a rogue broker. Having this in mind, the first thing you should check for before signing up at any trading platform is whether it is regulated and the presence of a valid license.
Never Base Your Decision on What Others Say
Making your decision on a particular trading broker should not be informed by word of mouth, hearsay and reviews alone. Unlike Amazon, positive reviews alone will not help you since most reviews on binary options brokers are false. A trader should search for a broker’s information widely and especially on forums.
Most brokers are aware that traders will embark on searching for reviews about their services before signing up at their platform. Equipped with this, the brokers run different sites and forums where they pay individuals to write exceptional reviews. Having this in mind, traders should never search for a broker’s review first but ensure that they are regulated and licensed. You can compare different brokers by reading our unbiased broker reviews.