I am not going to discuss deep about how Binary Options works but I will show you some of the scam that is associated with it. Many foreign brokers have exploited the weakness in Binary Option as there isn’t a strong regulation over it since most of the operations are done over the internet through the broker’s platform and not Over The Counter (OTC).
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Countries such as Australia, Belgium, Canada, Cyrus, France, Israel, Malta, New Zealand, United Kingdom and United State have either ban the trading of Binary Option or have place a strict restriction on its practice. But other countries in Asia and especially in Africa do not have strong regulation to counter these people (brokers) and keep them in check, which is the reason I am writing this article to enlighten traders so that they do not fall victims to these scammers.
The Federal Bureau of Investigation (FBI) estimate that approximately $10 Billion are being scammed from Binary Option Traders worldwide annually.
For those of us do not have an idea about what Binary Option is I will explain it a bit.
What are Binary Option?
Binary Options is a type of Financial Options where traders guess or analyse the price of a Financial Option, in Binary Option, the pay-out is usually fixed and has to be correct within a specific time frame.
Example, let us assume that the trade A believe that the price of Gold is going to be bullish and will surpass the price of $1,347 within the next 5 minutes, if the trader stake $10 and he is right he will earn a certain percentage of this initially stake, sometimes it range from 60% to 90%; that is he (the trader) will receive a pay-out of $1.60, that is if the pay-out is 60 percent.
What is wrong about this, you may wonder, well assuming he is wrong and the price falls below $1,347, he will lose his entire stake, so the pay-out will be zero.
CHECK THIS OUT: Do brokers Trade against their clients?
Well in this case, when you fail in your analysing you lose everything and when you are correct you get a tiny portion of it, which is not entirely fair.
Many brokers have come out with fancy and tricky methods of ripping people off their hard earned money. Some now offer you a discount if you lose, giving 1% or 10% of your initial stake if you lose in your analysis, this is to encourage people to keep “gambling” more. While some have a method where you can choose how to trade, whether you should guess or analyse when the price will be in the range of your intended price level or whether the moving price of a financial asset will strike your intended price twice.
Irrespective of the brokers method of deceiving you, more people lose money than they ever make in Binary Option Trading, we will look at some of the popular scam strategies these broker uses.
But before I proceed, keep it in mind that not all Binary Option Brokers are Scammers, as many huge investor till trade Options to offset their risk.
Scam Strategies Most Binary Option Brokers uses
Get Rich Quick
These people know that a huge percentage of the people who comes into Binary Option are not so financially buoyant, and are looking for money or better still a quicker way or easy way to make this money. So these scam broker exploit these means, by promising traders that they can earn big, buy their dream car and house from Binary Option Trading while in reality the reverse happens. they (Binary Option Brokers) usually rip these trader off before they can say JACK ROBBINSON
Everything in life including your daily activities include a tiny bitty percentage of risk in it, nobody knows the future but these broker makes it seems that trading Binary Option is totally not risky. Usually when they throw seminars and conferences, they will discuss on how hundreds of people have been earning without any risk of losing and low you can try it out with less capital.
I, myself have attended such seminars in my home country and I have seen how they have mange to brain wash people into joining them, I hope you don’t fall victim too.
One of their popular advertising medium is Facebook, because they know that they can reach a wide range of audience, who have no clue about what Binary Option are and trick them into opening accounts and depositing. Any time you see such companies on Facebook promising to make you hundreds or thousands of dollar daily or hourly please do yourself a favour and run because they are scammers.
“Even Facebook have ban such adverts from their ad-network early 2018”
Another medium they use is to affiliate with local agencies who then go to the local media such as local television channel and local radio station to talk about how Binary Option change their lives, while in the real sense those local medium are paid to air total crab to you the viewer.
Robots that makes Money
Have you ever seen an advert that shows you a picture of a robot that can make you money while you sleep or indicators that can show you entries level on the chart and those entries are 90%-100% accurate? Then you have seen a scammer. These people now device another means, where they tell you that there are artificial intelligent or software that are always active 24/7 ready to make money for you, if it were that easy then everybody would have been very rich by now.
Do not fall for these tricks even multibillion dollar financial institution that have algorithm and high frequency robot do not come out and brag about it online
Dep osit and get 200% back, well we see that a lot but the problem here is that it’s the traders that find such brokers all in the bid of having more money to trade which they end up losing all both there deposit and the bonus inclusive.
So when next you see such bonus, be cautious.
Though not all Binary Option brokers are fraud and scammers but we cannot denial the fact that a large number of them are. I advise traders who wish to trade Binary Option to do so with brokers that are genuine and transparent in their dealings and I must agree with you that finding such broker is a bit difficult.
When looking for a Binary Option broker, the first thing you should do is look out whether it is regulated or not. Some of these brokers are not and tries to target countries which do not have a good financial regulatory structures.
After that you should do a thorough check on their reviews, thank goodness for this age of technology and fast internet connection, it has made it easier to get information off the internet so you should read they experiences of people who have use them.
Next, look at their personal details such as phone number, if possible you should call them on a business day o t see if they do pick up and respond, next, is their address use google map and make sure they are at where they say they are and finally the customer support, is it always offline? These are what to look out for.
Also remember that everyone experience differs, there are some who do not have the proper knowledge of how the Financial Market operate and no clue at all on how to trade Binary Option and when such people make loss or end up blowing there account they run off tagging such broker a scammer. So you need to be able to filter a good review, a bad review and a review that is baseless.
If you are having difficulties in choosing a Binary option broker, you can contact me or comment below, I would love to hear from each of you, please do comment below to share your experience.