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Ways to Avoid Scam in Binary Options Trading
Binary options are very popular among traders all over the world, and when something is as popular as they are, many scams want to take advantage. It is impossible to prevent scams from entering the market as even the best regulation can’t challenge innovative methods scams and fraudsters are using.
Still, if traders want to trade safely, they can do so by following several easy steps. In this article you will learn:
What are Binary Options Scams?
Binary options scams are usually companies that claim to be legit brokers or auto trading services but are frauds. Once you deposit the money with such company, you won’t see that money again as it is impossible to make a withdrawal with such brokers.
Scam brokers are considered to be those that practice scam tactics in convincing new clients to make a deposit. Such methods include
- Cold calling
- Downplaying the risk
- Using stolen data
In case you receive a phone call or an email from a broker you never registered with. It is best to ignore it. Don’t let them convince you. Scam binary brokers will always claim how something is an exclusive opportunity, just for you, but it is never true.
Also, the fact that a binary broker is using stolen data and can reach you via private means of communication such as email, only shows how shrewd they can be. Do you really want to provide your credit card detail to a company such as that? Probably not.
Also, keep in mind that sometimes you can find out that a broker is a scam only after you made a deposit. For example, they can insist on offering you managed account where you lose all control of your investments. They can make threats, use psychological games and pressure you into making more and more deposits. The broker should never neglect your opinion or manage your investments.
Another thing that is very suspicious and that can indicate that a broker is a scam is the lack of terms and conditions on the website. Terms and conditions not only helps you understand the service better but also offers you an insight into your obligations and procedural elements. If the broker is hiding something, the first sign of a scam is missing terms and conditions. This document is usually very long and complicated, but don’t hesitate to read it and ask for additional explanations.
Terms and conditions explain all about withdrawal limits, procedure, reveal details on how dormant accounts are handled etc. They are also obligatory, unlike the stuff is written on the website. Keep this in mind. Compare the content of the website with content of terms and conditions and if there are too many differences, avoid that broker for your own good.
You want your money to be safe from the very beginning of the trading process and it is much easier to check broker status without involving with scams in the first place.
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How to avoid binary options scams?
Binary options scam brokers tend to be very convincing with their promises. They can make you think how they operate in a magic world of binary unicorns where you will become a millionaire.
The first rule of avoiding binary scams is keeping a cold head. If the broker promises something that sounds too good to be true, it probably isn’t. Be realistic and don’t expect to become a millionaire over course of night, no matter how lucrative binary options might be.
The other important rule is to read news and reviews so you know what is going on in financial markets. Objective 3rd party reviews can help you in avoiding scams, and regulatory bodies often issue warnings on different types of frauds, including binary scams. Of course, keep in mind that sometimes regulatory bodies react to little too late, so look for other suspicious signs as well. Avoiding scam brokers requires some effort.
There is also a solution of trading only with regulated brokers. Regulatory bodies all over the world issue licenses for binary options brokers. Even though sometimes regulated brokers turn out to be scams, mostly because of changes in the ownership structure that might affect the way they operate their business.
Also, you can checklists published by your local regulatory body, but keep in mind that sometimes regulators tend to be slow in detecting scams. They sometimes issue a warning on a broker that is long gone or that has already scammed many customers. The best way to read about scams is to be focused on specialized media that will give you fresh information and introduce you to reliable brokers.
What to Do After Depositing with a Scam?
Ok, let’s imagine the worst-case scenario. Imagine you made a deposit with a scam binary broker. What now?
First, it is important not to deposit any more money with that scam broker! There is a high chance the broker will call you and ask for more money but don’t do it. Every dollar deposited is a dollar lost.
Next thing you should do is request a withdrawal. There is a high chance your scam broker will say it is not possible if you don’t deposit a certain amount. Ignore it and request the withdrawal again. If necessary ask for legal advice and let the broker know you are not alone. Research other cases with your broker on online forums and see how other people got their money back. Of course, if you are trading with a broker that offers bonuses, keep in mind that in case you accepted a bonus, you have a specific trading volume you must reach before making a withdrawal.
You can also contact your local regulatory body and ask for help. Don’t forget to contact the regulatory body where the broker is licensed, in case they have a license. They can do necessary steps and revoke the license and prosecute the broker if needed.
Act fast and don’t let the broker waste your time. Make sure to keep all correspondence and make a screenshot of your trading account in every stage of withdrawal. Often, scam brokers close the accounts without prior notice, but this way you have evidence that can be crucial in your case.
Mistakes to Avoid as Binary Options Trader
Are you interested in investing in binary options?
If your answer is yes, then you are on the right place to gather valuable information about to become a successful trader.
This guide is intended for all South African traders who want to learn all tips and tricks of profitable binary trading and of course, discover mistakes to avoid as binary options trader.
As you might already know, binary options industry began in 2008 on global market, and very quickly became searched online investment type in South Africa.
In a short time, binary trading on South Africa became field of interest to many ordinary people in South Africa, who wanted to participate on financial market and earn money.
So why is trading binary options popular?
Possibility to invest in different assets as beginner trader and maximize profit is something that is appealing to most people, which is understandable. It is everybody’s wish to have successful trades, especially when there are plenty of traders who have continuously positive trading results.
There are different ways on how to become pro trader and what does it take to avoid scam in binary options. Therefore, we believe how our guide on mistakes to avoid as binary options trader will be of help to interested South Africans.
The initial and most important step of successful binary trading journey is to find a reliable binary broker who offers secure trading platform. Once traders succeed in that, the biggest issue is solved.
Below we will provide you with relevant information about possible mistakes to avoid as binary options trader. This is very important for traders to reduce risk and have profitable trades only.
Having Unrealistic Trading Expectations
This might seem as a little thing, however it definitely isn’t, especially for new and inexperienced traders.
So why is that? This is a big mistake, done by many new South African traders. Since there is no previous financial knowledge, traders right away think how they will earn high profits without any strategy and in their first trade.
Having high expectations is good, but unrealistic ones are those to avoid. Although many brokers, including reliable ones, offer high return on investment, is doesn’t mean that traders shouldn’t have a strategy by which they would place trades.
Unclear Terms & Conditions
This also comes as one of the mistakes to avoid as binary options trader.
Unclear terms and conditions are closely related to scam brokers who don’t provide significant information to their traders, such as this one.
If South African traders are planning to invest in binary options, it is highly recommended to check broker reviews and get detailed information if a broker is safe enough to trade with and earn money.
With most scam brokers, T & C will be either unclear or even missing.
This is something that traders should keep in mind before they deposit. Professionals know these things but new traders still don’t have sufficient knowledge and that is why they should be cautious.
Brokers listed on our website are reviewed and offer secure and protected platform for traders in South Africa.
Regardless of platform type and available features, platform should be easy to use in order for traders to navigate over it without any difficulties.
Poor Money Management Plan
Non-existing money management plan is definitely considered as one of the mistakes to avoid as binary options trader.
This is probably one of the main reasons why some traders fail in binary options trading. Successful traders spent a certain amount of time analyzing market situation and different trading assets to be able to accurately predict price movement.
For those traders who don’t want to invest time in the trading process, can choose auto trading option. Trading with free automated software is simple and yet profitable, therefore traders can check our Binary Options Robot review to know more.
So to have a good money management plan, traders should make a logical plan combining strategies and market news which reduces risk level. Having a bad strategy which traders don’t understand is mostly likely to be leading to failure and that is something South African traders want to avoid.
Choosing to Gamble Instead of Trading
Binary options traders should have in mind how trading isn’t the same as gambling and there are more than one difference which support this fact. Gambling relies completely on luck, however if traders do the same thing for binary options trading they will experience losses.
Binary options trading requires more serious and business approach. It means how traders should try out different strategies to see which will work the best for them and lead them to money gain.
Having a good strategy plan, discipline and clear head are great characteristics to start binary trading journey and succeed in it.
Get the Most from Education Guide Materials
One of the reasons why binary trading is widespread among traders in South Africa is because they made online trading more accessible to ordinary people, and not just professional traders with years of experience.
South African traders are able to trade with many trustworthy brokers who operate on South African market. They all differ by certain characteristics and available features, but also enable traders Education Area.
Why are education materials relevant? Depending on a broker, traders can choose among many useful education materials which can be out of great help and assist traders to become more experienced. Brokers, such as 24option, IQ Option etc are considered as leading binary options brokers.
On their platforms, they offer a wide selection of guide articles and tutorials which should be sufficient for both inexperienced traders and pro traders. Also, FAQs, webinars, glossary and different guides are on traders’ disposal. Thanks to its advantages, there is a big chance for new traders to avoid beginners mistakes when trading binary options.
How to Avoid Online Trading Scams
If you are new to the world of binary options trading, then you may be experiencing some confusion when it comes to choosing a broker or other services such as robots and signals. How do you know if you are selecting a genuine or a fake company and what is a typical binary option scam?
Identifying the difference between the two can be hard. Often these schemes are so convincing that they resemble legitimate companies and traders cannot spot the difference. There are differences, however, and by carrying out some research, you will be able to identify those brokers, robots and signal services that are legitimate and those that you should avoid.
From the licensing to whether they offer a demo platform to carry out “practise trading” with virtual money, there are critical differences between the real thing and those that will leave a bitter taste and a big hole in your product. To make sure you get the best out of your trading experience it helps to know how to spot the difference.
In this guide, you will learn:
A typical example of a binary options scam The reasons that these fake brokers exist How to avoid losing money yourself to scams
Take your next step:
A Typical Scam Example
There are a few investment scams to be wary of if you want to trade binary options, some more common than others. Many of them are operated online while others take place over the phone. In many instances, the trader starts their search online which returns many results; if you type the term “binary options broker” into Google, there are over a million search returns.
Now for every genuine company, there could be as many as ten fake websites claiming to be the real deal. Many of them are websites set up to look like brokers with all the terminology, graphics, customer testimonials and social media profiles (which are all fake). What the thieves do is encourage you to sign-up to the trading platforms, make a minimum deposit of $250 and then that’s it, your money is gone.
In this example, there is no binary trading platform to use. Some brokers will go so far as to call you claiming to be a senior advisor and asking you to make a higher deposit. Now while it seems like they wouldn’t get away with this for very long what they do is set up under multiple names so that they can scam lots of people in a short space of time.
Like any fake trading scam or fraudulent activity, they exist because they are a method for dishonest people to make money.
Why Binary Scams Exist
Like any scam or fraud activity, they exist because they are a method for dishonest people to make easy money. Since the introduction of binary trading, there have been people setting up fraudulent websites and conning people out of their money. As long as people are willing to part with their money, there will always be people that want to take it from you. Because the gains can be large with online trading people are willing to take high risk.
If the dishonest few want to make money quickly without any morals when it comes to ripping people off, they will use every trick in the book to make it happen. This particular industry is an easy target because all trading takes place online, is not always regulated and often people don’t know how to spot the real thing from the fake.
Rogue binary options brokers even go so far as to ring people up offering them unbeatable deals if they make a deposit using a credit card or bank transfer, and guess what? Yes, you make your deposit never to see them again and, you lose money forever. Even worse, they use your personal information in identity theft scams, further causing harm.
How You Can Spot a Scam
If you know what you are looking for, then it becomes much easier to spot the genuine companies from the investment scams. Ask yourself this though “does it look too good to be true?” If the answer is yes, then it probably is too good to be true. If someone is promising to return $1,000 in 5 minutes for doing nothing, then be wary and probe further.
Check out the credentials of the company. If you can’t find the broker listed on any of the popular review sites or there is little or no evidence that they are a real company then the chances they aren’t. Be wary of companies offering the ability of trading binary options using signal providers or management services. This sector of the industry is high risk.
There are also lots of binary options trading scams that have been uncovered already, like the famous “Google Trader scams”. These will come up like a beacon when searched in Google with lots of entries about them from disgruntled traders on various forums. Just typing the name into a search engine is often enough to discover if this particular options broker has been hitting the latest news headlines and is operating under false pretences.
How to Avoid Being a Victim
There are a few simple steps that you can take to ensure that you don’t become the victim of a binary options fraud. Firstly you need to ensure that any broker, robot software or signal service that you use are reputable. You can tell this from their licensing. Make sure they have Cyprus Securities and Exchange Commission (CySEC), Commodity Futures Trading Commission (CFTC) or other recognised licensing. Check their online reviews, feedback and whether there is an undeniable history of unethical trading.
The next step is to see whether they offer a free demo account. If you can sign up to a brokers platform and trade with a demo account before depositing any funds, this will give you a good idea as to whether it is a real broker or whether it is just a dummy website set up to take your money.
When it comes to phone calls that come from people claiming to be a senior adviser, then be very wary. If they are calling you with “a deal that is too good to miss”, don’t make any deposit. Calls like this are a common ruse, and they will ask you to make an investment that will disappear.
Now while there are risks and fraudulent websites out there, which you should avoid at all costs, this shouldn’t deter you from trading the market. You need to ensure that you choose your broker wisely and that they are a licensed firm with an excellent online reputation so you dont pay the price for it later. For more help and advice on online scams or binary scams in general, please visit the resources below;
Shelly is proud of her current position as Head of Brand for a well-known organisation that owns several brokerages in the trading sector. She’s consulted for us since 2020 and readers can benefit from her insider knowledge of how brokers work.
Legal South African Binary Options and Brokers for 2020
We have seen many people in South Africa with the desire to participate on the financial market and profit from it, but never knew how.
Now, with the appearance of binary options, financial trading has become easier than ever. With binary options South Africans now have an extremely convenient way of becoming traders through online investments with possible higher payouts than they have ever hoped for.
The best thing with binary options is that you don’t have to be an expert in trading. Binary options provides a straightforward way of making money and capitalizing on your limited insight into commodities, prices, stocks, currencies and everything in-between.
The attractiveness of binary options is composed of something else too. Its nature is very similar to gambling because in a way you bet that a certain prize will come up or down. Because of this, binary options has attracted many traders that love gambling too. It is also the reason why authorities have viewed it with doubt and were reluctant to regulate it.
List of Binary Option Brokers accepting traders from South Africa:
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