Binary options do unfortunately have a rather poor reputation. This is partly due to the fact that the business until a few years ago was largely unregulated, partly due to sometimes too aggressive promotional campaigns. Today, the situation is very similar to loans which means that scams can happen but it’s fairly rare. It is however mostly due to the fact that people are buying binary options without really understanding what they are buying. It is very common to see people claiming that they have been scammed but when you listen to their complains you discover that they are really upset about facts that are openly advertised and stated on the brokers website.
Below I am going to list some of the most common reasons that people feel scammed when they are trading with binary options. Read them and make sure that you do not make the same mistakes when you register with a company.
- If you accept a bonus you will not be able to withdraw any money (including your original deposit) until after you have traded enough to fulfill the bonus requirements. Contact the customer support and inform them that you do not want any bonus before you deposit any money. If a bonus have been deposited to your account it might be possible to remove it (different brokers have different rules) before you made any trades. Once you made your first trade it is not possible to change or remove the bonus.It does not matter why or how much money you want to withdraw. Once you have accepted a bonus all your money will be locked in your account until you fulfill the bonus requirement. They can not and will not make an exception from this rule.
- Use a reliable way to deposit money. I recommend bank transfer. To not send a check for a large amount of money in the regular mail. If you do you have no one but yourself to blame when the money gets lost.
- Understand that the broker is the opposing party in the option. You are not trading against other traders. You are trading against the broker. The broker sets the price of the option and will always have an edge against the trader. The trader will need to have a success rate that is higher than 50% to earn money. How much high varies from broker to broker and depends on what types of assets you have to trade with. The return you get if an option matures in the money is clearly stated before you buy an option. There is nothing dishonest about this. The key to the trade is to skillfully choose which options to buy and which not to buy. If you are unable to do so it does not mean that binary options is a scam. It only means that you need more training or that binary options trading isn’t for you. Most successfull traders will tell you that it is common to lose money in the beginning before you learn how to trade successfully. How long it takes to become skilled depends on your prior knowledge and how dedicated you are.
- Avoid trading an option type you do not understand. Exotic binary options can have very high returns but are unlikely to end in the money. Avoid trading in these unless you know what you are doing.
- No one can guarantee that you will earn money.
- To not allow anyone else, not even a broker representative to trade for your account. I know traders something ask the brokers to help them trade. Some brokers will accept to do this. They will try to make money but they might fail as well. Everyone will have cold streaks. If you let a broker or someone else trade for you then you can not get mad if they lose money.
- Understand that no technique is guaranteed to make money all the time. Many brokers provide a training school that will teach you how to trade. Whether or not you make money will depend on how well you apply these teachings to the current market situation. It is up to you to make money.
- Make sure you understand exactly what you invest in before you invest. Binary options are very open about what they are. But if you start trading without understanding what you are trading with then it is very easy to end up feeling scammed. This is however true for a long row of different other financial instruments including options, warrants, FOREX certificates, CFD:s, ETF:s and many more.
Not every one is suited for binary options trade. But if you understand what they are then you will understand that they are a tool that can make you a lot of money if you use them correctly. If you don’t you just end up loosing money. If you do it is no ones fault but your own.