Binary options trading provides investors with an easy (and in fact, fun!) way to trade and earn money. Ever since binary options appeared on the market, they have been considered as a good concept.
However, when they first became available to the public, they were highly unregulated and unmonitored, resulting in the appearance of many scam brokers.
Still, binary options trading is becoming regulated more and more, and scam websites are shut down, yet not everything is perfect. There are many reliable and credible brokers available, but among them there are some which are nothing but a scam.
In this guide, we will let you know how to spot scam brokers and choose the ones which are really credible.
- Learn more about binary options trading:
- Demo trading vs Live trading. Key differences
- How to become an Independent Trader
- What kind of trader are you? Trading styles explained
- How to choose the best markets for day trading
Out of the Blue
If you receive a call or an email from a broker claiming to offer too good to be true services, then chances are, they are trying to involve you in a scam.
It is not likely for reputable brokers to go and call people, promising high returns and fast profit – simply because things don’t work that way.
If you receive a call or an email with an “offer you cannot afford to miss”, you really want to miss that one!
Another thing is that a credible broker will never break the privacy rules by calling without your consent. A reputable broker will call you only if you have given them the permission to do so.
2. Automated Trading
It seems like a good concept to have robots or professionals working at a company help you out with your trading efforts. However, this is an evident conflict of interests for the obvious reasons – you are there to make money; the broker makes money whenever you lose money.
If a broker is pushing their “team of professional” too much, this can mean that they are really looking to involve you in a loss spree for their own benefit. Still, to be fair, there are credible brokers who also offer this 1-on-1 consulting with a professional, but they are really trying to help you out.
3. Unclear Terms and Conditions
Before choosing a broker, you need to go around their website and familiarize with their terms and conditions.
If they don’t seem legit, or if they are highly unethical, then you really need to close the website down and go look for another broker which is really credible.
Since the terms and conditions are a way for brokers to protect themselves, be sure to check well what they are protecting themselves from.
4. Bonuses Policy
All brokers offer different bonuses to investors. And to be honest, bonuses are really great since they give users an additional boost they can take an advantage of.
However, when the bonus seems really good, you need to check what is going on. To be fair, there are legitimate brokers that offer 100% bonuses, and they are totally real.
However, before deciding to hop into the world of binary options trading with a broker, be sure to read their bonuses policy. Such thing is supposed to be found on their website. If it isn’t there, there might be something fishy going on.
5. Not Processing Withdrawals
Let’s say you have made some investments and now you want to withdraw your money.
The reputable broker will ask you for your identification documents in order to make sure that is really you who is withdrawing the money.
However, with scam brokers, the story is a little bit different. Even if they ask you for your verification documents, that doesn’t mean that they are working and processing your withdrawal.
Soon enough, you may find yourself writing countless of emails and picking the phone a hundred times, yet you still will not get an answer. Some scam brokers even make the withdrawal too complicated, hoping that the user will eventually give up.
6. Check Online Blacklists
Binary options trading has been around for some time now, meaning that many of the scam websites have already been uncovered and added on the blacklist.
Online you can find many credible blacklists of brokers you should stay away from, and believe us when we say that you should trust the lists. AML (anti-money laundering) is working to uncover scam brokers and warn users not to put their trust in such brokers.
In reality, scams exist and they can mess up the overall picture for the binary options trading brokers with provide good and trustworthy services.
Still, binary options trading is a wonderful thing to use if you would like to make some additional earnings. Choosing a credible broker is the most important thing you should do since you do not want to waste your money and get scammed.
Be sure to check the blacklists online and read some users opinions before committing to a broker. You can also head to our reviews page and see what we think about certain brokers! Stay safe and away from scams!