Scam brokers are the sickness of the industry. Binary options as a
trading instrument have a bad reputation mainly because of scam brokers.
Too many traders have been ripped off during the years, and they spread
negative comments all over the internet.
The fact is that binary options could be a profitable instrument if you use it at a reliable broker that won’t manipulate your transactions. There are many reputable and reliable brokers that are regulated and treat their customers fairly.
However, because of the scam brokers, the whole industry suffers, and some measures should be taken. For example, many scam brokers use white labels from platform providers that don’t fall under regulation. One way to reduce scam brokers is to regulate the platform providers.
Some of the most common problems you will encounter when dealing with a scam broker are delayed or canceled withdrawals for reasons that don’t make any sense.
Another common withdrawal issue (maybe the most common) is receiving a phone call from your account manager asking you not to withdraw and offering you “incentives” to make you keep the money in the account. He or she will often offer you more bonus money, signals, free trades, a higher tier account (an upgrade from your current account to a Gold or Platinum, depending on their account structure). If this happens, stay firm in your decision to withdraw and let them know you want your money, not some cheap offer. If you still don’t get the withdrawal, you might be dealing with a scam broker.
However, if you haven’t requested a bonus and a broker wants you to reach some trading volume, for example, x40 your deposit + bonus, that’s a clear sign that broker is trying to scam you and withdrawal will be almost impossible.
Price manipulation is not a myth, and in fact, it’s not hard to do it because the broker can easily change the price you see on your account. The broker can’t change the actual market price of course, just the price you see on its platform.
You cannot avoid price manipulation, but you can find out if it occurs, and you can act accordingly (by “accordingly” we mean get your money out ASAP!). When you see sudden price reversals or volatility spikes, open a chart provider and check whether that movement also appears there. Netdania is a good source for free charts, but you can also find other options online.
Sometimes, an account manager will trade without your consent. That means he or she has access to your account, and no one but you should have access! It’s a red flag and the sign of a scam. Also, it’s time to get out because you can end up robbed.
Unfortunately, many traders also complain about regulated brokers. Most often these are brokers with CySEC licenses (Cyprus). CySEC is the regulator for the European Union.
To be on the safe side, your broker should be regulated with a financial institution in your country of residence, such as the CFTC in the United States, FCA in the United Kingdom or ASIC in Australia. Be aware that many brokers claim they are registered with a certain institution, but this doesn’t mean they are regulated by it.
If they offer you an account manager who is willing to trade with your funds, better think twice. When you make profit, the company loses money; the binary broker simply works as a casino. Unfortunately, there are many naive people who believe someone will make them free money. The brokers know that, and with a number of phone calls, they can even make you deposit more after you lose your first deposit.
At a fully regulated broker, it is absolutely forbidden for a third party to trade with your funds. If you submit your account details to someone else, and this someone loses your funds, the regulator can do nothing about it.
The good brokers build powerful platforms with trading indicators that can actually help you in your analysis on the market.
This way, you can do your daily job and the robot will make you money. Sounds like the perfect solution to your financial problems, right? Yes, it sounds good, but it is a fraud of course.
If you are a serious trader, you will be looking for a regulated broker with fair payouts. You won’t be interested in free trades and e-books with ridiculous strategies.
If the broker has a button “Open demo account” or “Trade Demo” on its website, in most cases, it is a reliable broker.
The bottom line is: if you open an account with a
broker that offers free demo accounts and/or low minimum deposits is
less likely to be scammed. Finding a broker with regulation in your
country of residence could be a difficult task because most binary
brokers are EU regulated by CySEC. However, there are also ASIC and CFTC
regulated brokers that offer binary trading. Hopefully, more financial
institutions will regulate binary option firms.
The problem is that there is still a debate over whether binary options fall under financial regulation or gambling license.
You can find good brokers for sure, but you still need to be a good trader in order to make profits.
The binary options industry is not the safest out there because of all the scam brokers that hunt your money. If you keep on your toes and stay vigilant, you can learn to avoid them.
Source : http://binaryoptionspost.com/how_do_i_avoid_scam_binary_options_brokers.htm
The fact is that binary options could be a profitable instrument if you use it at a reliable broker that won’t manipulate your transactions. There are many reputable and reliable brokers that are regulated and treat their customers fairly.
However, because of the scam brokers, the whole industry suffers, and some measures should be taken. For example, many scam brokers use white labels from platform providers that don’t fall under regulation. One way to reduce scam brokers is to regulate the platform providers.
What are the risks if you trade at a scam broker?
- You won’t be able to withdraw your money
- An account manager might manipulate your asset’s price
- A sales representative might attach a bonus to your deposit without your request
- An account manager might trade with your funds
Some of the most common problems you will encounter when dealing with a scam broker are delayed or canceled withdrawals for reasons that don’t make any sense.
Withdrawal issues
Your withdrawal request could be transferred to the broker’s legal department for investigation. If you know you didn’t abuse their software in any way, you didn’t violate the terms and conditions, and basically, you didn’t do anything wrong/illegal, but your withdrawal is still delayed for some unclear reason, it’s a sign that you may be dealing with a scam broker. Ask for clear explanations as to why your request ended on the legal department’s desk and do your best to get your money out and look for another broker.Another common withdrawal issue (maybe the most common) is receiving a phone call from your account manager asking you not to withdraw and offering you “incentives” to make you keep the money in the account. He or she will often offer you more bonus money, signals, free trades, a higher tier account (an upgrade from your current account to a Gold or Platinum, depending on their account structure). If this happens, stay firm in your decision to withdraw and let them know you want your money, not some cheap offer. If you still don’t get the withdrawal, you might be dealing with a scam broker.
Bonus frauds
Usually, if you accept a bonus, you have to reach a certain trading volume before being able to withdraw even your own money. If this limitation only applied to the bonus amount, we would be ok with it, but some brokerages extend the limitation to your own money. It’s not fair, but it’s the way the brokers work and doesn’t necessarily mean you are dealing with a scam brokerage.However, if you haven’t requested a bonus and a broker wants you to reach some trading volume, for example, x40 your deposit + bonus, that’s a clear sign that broker is trying to scam you and withdrawal will be almost impossible.
Price manipulation
Brokers can manipulate the price they give you for a certain asset. If you are dealing with a scam brokerage, you can expect this to happen when you become profitable. When the broker sees you are making many profitable trades, it can change your strike price or closing price. This is a big risk for obvious reasons because a profitable trade will turn into a losing one.Price manipulation is not a myth, and in fact, it’s not hard to do it because the broker can easily change the price you see on your account. The broker can’t change the actual market price of course, just the price you see on its platform.
You cannot avoid price manipulation, but you can find out if it occurs, and you can act accordingly (by “accordingly” we mean get your money out ASAP!). When you see sudden price reversals or volatility spikes, open a chart provider and check whether that movement also appears there. Netdania is a good source for free charts, but you can also find other options online.
An account manager trades your funds
Account managers can promise you profitable trades if you give them access to your account. This is a major issue, but unfortunately, it happens a lot with scam binary options brokers. Don’t believe for a second that an account manager wants you to make money. No! If you make money, the brokerage loses and the account manager doesn’t want his or her employer to lose money.Sometimes, an account manager will trade without your consent. That means he or she has access to your account, and no one but you should have access! It’s a red flag and the sign of a scam. Also, it’s time to get out because you can end up robbed.
How to avoid scam brokers
In most cases, you realize you are dealing with a scam broker when it is already too late, so you better avoid the scam brokers before you register and make a deposit. Here are some tips to identify a scam broker.Regulation
Always ask about regulation. Most of the scam brokers operate unregulated with registrations in offshore zones. If the broker is not regulated, it doesn’t automatically mean it is a scammer, but you’d better be on your guard. No regulation also means that you don’t have anyone to complain to in case of fraud.Unfortunately, many traders also complain about regulated brokers. Most often these are brokers with CySEC licenses (Cyprus). CySEC is the regulator for the European Union.
To be on the safe side, your broker should be regulated with a financial institution in your country of residence, such as the CFTC in the United States, FCA in the United Kingdom or ASIC in Australia. Be aware that many brokers claim they are registered with a certain institution, but this doesn’t mean they are regulated by it.
Customer Support
Before you register at a broker, get in contact with customer support via live chat. You can ask them all kinds of questions concerning withdrawals, price quotes and promotions. If your questions are avoided and the representative pushes you to register and deposit, chances are you are dealing with a bad broker. The support staff should offer information, not try to sell you an account.If they offer you an account manager who is willing to trade with your funds, better think twice. When you make profit, the company loses money; the binary broker simply works as a casino. Unfortunately, there are many naive people who believe someone will make them free money. The brokers know that, and with a number of phone calls, they can even make you deposit more after you lose your first deposit.
At a fully regulated broker, it is absolutely forbidden for a third party to trade with your funds. If you submit your account details to someone else, and this someone loses your funds, the regulator can do nothing about it.
Trading Platform
A scam broker is less likely to build its own trading platform because that involves larger investments and longer development time. Thus, they prefer to buy a white label from one of the large software providers. The owner isn’t planning for a long life in the industry, only to make quick profits and run away.The good brokers build powerful platforms with trading indicators that can actually help you in your analysis on the market.
Auto-signals
Those companies who are willing to fraud you also have an arsenal of so-called auto-signals and robots. These are supposedly outside software that provide auto-trading. You deposit money in your trading account, you buy signals membership for one month, and you connect your account to the robot.This way, you can do your daily job and the robot will make you money. Sounds like the perfect solution to your financial problems, right? Yes, it sounds good, but it is a fraud of course.
Promotions
A serious broker is less likely to offer you some cheap tricks to open account with them. When we say cheap tricks, we mean bonuses, free trades, free coaching, free e-books or something else “free”. Nothing is free at the end because the brokers won’t give you anything until you make a deposit.If you are a serious trader, you will be looking for a regulated broker with fair payouts. You won’t be interested in free trades and e-books with ridiculous strategies.
Free Demo
A scam broker would never offer you a free demo. It will always want you to make a deposit first.If the broker has a button “Open demo account” or “Trade Demo” on its website, in most cases, it is a reliable broker.
Low Deposits
If the broker offers a small minimum deposit ($5-$20), it is very likely to be a good broker.The problem is that there is still a debate over whether binary options fall under financial regulation or gambling license.
You can find good brokers for sure, but you still need to be a good trader in order to make profits.
The binary options industry is not the safest out there because of all the scam brokers that hunt your money. If you keep on your toes and stay vigilant, you can learn to avoid them.
Source : http://binaryoptionspost.com/how_do_i_avoid_scam_binary_options_brokers.htm
No comments:
Post a Comment