Since binary options have become as popular as they have recently, it was only a matter of time before the con artists and unscrupulous brokers started to crawl out of the woodwork. Whether you are new to trading or you have been doing it for years now, it is important that you know how to avoid scams and cons when it comes to binary options. The following are some of the biggest problems that traders have had to face. Understanding the scams should help you to avoid making similar mistakes.
One of the things that you need to understand about binary options, and any type of trading vehicle, is that there is always risk involved. A big problem that some of the traders faced were brokers who downplayed the amount of risk that was actually involved. Bad brokers would sometimes tell new traders that there was a much higher percentage of winning trades than there actually were, lulling them into a false sense of security. They would also have “testimonials” from supposed clients that affirmed that they were making tens of thousands of dollars regularly with their trades. Whenever something seems too good to be true, it usually is.
That’s not to say that you can’t make money with binary options; you can. However, it takes practice and research, and you can’t expect that you will always win your trades.
Out of the Blue, They Approached You
Some brokers have actually taken to cold calling people and trying to get them to use their services for trading binary options. They pitch them with the unbelievable numbers mentioned in the last section and try to “sweet talk” the person on the other end of the phone into becoming their client. You have to wonder how they got your phone number or email. Most of the time, they are just calling and emailing en masse in the hopes that they find a few gullible people.
You should be the one researching the brokers and approaching them after vetting them, not the other way around.
The Fine Print
When a broker has someone on the verge of becoming a client, they aren’t always forthcoming with all of the “fine print” that includes their terms and conditions, and this is a problem. What are the rules they have in place? How much money do you need to place in your account? If they have a bonus system, are they vague on how it actually works? How can you withdraw money from your account? Is there a penalty for closing the account? Many underhanded brokers will talk around these subjects, trying to wow you with the potential money you could make.
Keep in mind that most of the binary options brokers in business now are legitimate. However, you can’t simply rely on the law of averages to be on your side. You need to vet them before you actually work with them to avoid the scammers and con artists that remain.
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