Binary option scams are nowhere near as prevalent as they once were. However, it is true that do remain in existence. Above all, the modern trader will want to fully examine brokers prior to issuing a financial deposit of any amount. Broker reviews are a helpful tool for learning more about brokers. You will also need to know what a binary options scam actually is in order to avoid one. Let’s examine the facts.
Scams are presented in more than one form. Some of these will be quite obvious. However, professional scam artists can render scams difficult to detect, especially by the novice trader. The most common problem also happens to be the binary options scam which traders fear the most – non-payment of funds.
While it is possible that this could occur in direct relation with a scam, it could also occur unintentionally. How, you ask? Through mismanagement of funds, poor business practices, or simply a failing broker business. For this reason, some consideration should be given to broker financial stability. Warning signs could include offering extremely large payouts, massive bonus amounts, or being a young, unproven broker.
A less detectible binary options scam would be that of having the platform contain invalid financial numbers. One example here would be having a trade end in favor of the broker based on the final asset price provided by the broker, only to search elsewhere and find out that the final price was errant and that the trade should have ended in your favor. Avoid this scam is as simple as finding out where the broker obtains its financial data from and whether or not this information is streamed in real-time.
A less common form of binary options scam would be payout percentage problems. These amounts should be fixed, but could be altered on winning trades with less profits being added to your account on winning trades. This binary options scam can occur subtly, and therefore will require a close monitoring of your added account totals after each lucrative trade. Should any problems be noted with these amounts, stop trading and contact the broker immediately.
Fortunately, there are several easy ways in which to avoid a binary options trading scam. These easiest of all would be taking the time to read broker reviews. These tend to provide plenty of helpful information which should include a determination of broker reliability. With the majority of brokers having opened for business 2-3 years ago, this time frame is more than long enough for a determination of reliability to be made.
Additional scam exposing methods include testing financial data accuracy and monitoring your account. In order to test financial data, compare the data within the platform to that which is provided by a well-known data source such as Bloomberg or Reuters. Be on the lookout for any significant discrepancies. Account monitoring is something which should become a habit and take place on a daily basis. Most have no problems with this, as financial totals tend to be closely monitored by all traders.
The internet places binary option traders at an advantage, as scam information can be quickly shared. The overall number of scams has greatly decreased over the past few years, down to a point where they are actually quite rare. While this is wonderful, it does not mean that traders are completely immune from falling prey to a scam broker. For this reason, we highly encourage you to post your own personal scam reports and information here so that it may be viewed by others and investigated. Together, we can work to ensure that our trading environment is indeed a safe one.