The risk of trading with dishonest binary options brokers
Below is an always up-to-date list of our top 3 trusted brokers. You can find a list of all the brokers we recommend here. They have already created a list of unauthorised firms.
While they are not calling them scams, they are making it clear that these firms are breaking the law by trading with UK visitors — so they are best avoided.
The full list can be found here: By contrast, the USA along with most other EU countries do regard binary options as financial products. Depending on where they are based, many platforms will, therefore, be subject to oversight from a regulatory body. It shows that the broker has to abide by certain minimum standards when it comes to service and transparency.
Taken in isolation, the act of placing a trade should be a straightforward one; and indeed, the usability of a platform tends to be a big selling point for brokers. Realising a profit through regular trading requires knowledge of how markets behave, the ability to read market conditions and an understanding of strategy. Read the smallprint, and be especially wary of needlessly convoluted procedures for withdrawal of funds. Terms regarding your initial deposit can be another source of contention; for instance, if you are denied access to the deposit until a certain number of trades are made — so your money is tied to the platform from the moment it is handed over.
These tend to fall into two categories. The first is where you are called out of the blue and invited to sign up to a particular platform. Reputable brokers do not need to make cold calls. You should always be clear about who you are dealing with. A good broker will be upfront about its identity from the outset.
On occasion large accounts will be wiped out in hours. Always take responsibility for your own trades. Never allow a broker to make trading decisions for you. There has to be a fair and transparent benchmark against which the broker sets its prices. If the broker reserves the right to set its own prices, you can assume that those figures will be skewed against you; in other words, a loaded deck.
The brokers listed below have generated a lot of complaints both directly and on the forum. The disputes vary from upselling and encouraging traders to over trade, to non-payment of withdrawals and price manipulation. If in doubt, trade elsewhere. There are plenty of honest brokers out there. These signal providers, or robot services, are either scams or not recommended for other important reasons.
If that happens, what do you do? Do you sit back and take it? Do you give up on trading? No, you need to stand tall and look out for yourself. They help claimants to explain the incident to the bank or credit card company, so that they fully understand what has happened. Some banks are unaware of binary trading and are unwilling to listen to claims. MyChargeBack help in this situation. They have a solid record of recovery from genuine claims.
The internet is loaded with ads, articles, companies and individuals trying to provide you with the next big trading strategy that will make you rich overnight. Take pause my friend, here are tips to help you spot the scam. What you actually need is an entire system. When you make a trading plan it needs to cover how you will enter markets, exit markets and how you will manage your money.
It also needs to tell you under what market conditions you do all these things. That is a system, it tells you everything you need to know about how you will trade. A strategy on the other hand only tells you when to enter and exit, and may not tell you under what conditions it works best or poorly.
In other words, a strategy may have missing pieces of information you need to be successful. Here are several things to watch for which could tip you off the product is probably a waste of money:. For example, the product may just be a series of indicators or a service that tells you when to trade, but not why.
If a product or signal service stops operating you are left with nothing. Stats are easily manipulated to tell partial truths or fabricate lies. Read between the lines. To understand performance you need several bits of information: You can usually get a sense of what vulnerabilities and tendencies a system has by looking at the above stats.
One of the main things is that the strategy should be tested over a long period of time, and in all market conditions—up trends, down trends, ranges, volatile and sedate conditions. Often marketers will only publish results for a period where strategy did very well. Markets rise and fall, you want to participate in both trends. Usually a quick trading forum search on Google will reveal what others have shares about a product or service. No trial, no deal. It should show you behind the scenes so that eventually you can trade on your own.
There is no reason to make every customer totally dependent. Be wary of stats that are thrown out. Of course remember though, past performance is not indicative of futures results.
Once you understand this you can quickly and simply save your time and money with these unscrupulous dolts. He or she will often offer you more bonus money, signals, free trades, or a higher tier account an upgrade from your current account to a Gold or Platinum, depending on the account structure. If this happens, stay firm in your decision to withdraw and let them know you want your money, not some cheap offer.
Usually, if you accept a bonus, you have to reach a certain trading volume before being able to withdraw even your own money. If this limitation only applied to the bonus amount, we would be okay with it, but some brokerages extend the limitation to your own money. Brokers can manipulate the price they give you for a certain asset.
If you are dealing with a scam brokerage, you can expect this to happen when you become profitable. When the broker sees you are making many profitable trades, it can change your strike price or closing price. This is a big risk because a profitable trade will turn into a losing one. When you see sudden price reversals or volatility spikes, open a chart provider and check whether that movement also appears there. Netdania is a good source for free charts, but you can also find other options online.
Account managers can promise you profitable trades if you give them access to your account. This is a major issue, but unfortunately, it happens a lot with scam binary options brokers.
It is also possible a manager will trade without your consent. That means he or she has access to your account, and no one but you should have access! The binary options robots are also very popular scams. This auto-trading software is heavily advertised as the best money machines. You just need to make a small deposit, and the robot will double it or even triple it in a few days. This, supposedly outside, software that provides auto-trading is usually connected to a scam broker.
In theory, you deposit money at the broker, then you connect your trading account to the robot, and the cash flows run into your bank account. Of course, this is a deceptive illusion, and this robot will only blow your account.
Then, you will contact customer support, and they will suggest you make a bigger deposit to experience the full potential of the robot. To better understand how fraudulent this software is, you can think about the following. If this robot is so profitable and all traders make money, why is it free?
How do these guys monetize? Where there is a lot of honey, there are also some flies buzzing around. In our case, the flies are so-called binary gurus. They present themselves as seasoned pro traders, former university mathematicians who have created the ultimate These guys create fake accounts on Facebook and YouTube to spam testimonial messages.
They promise you big profits in the short term and usually are trying to sell you a trading system or an auto-trading robot. What they are actually doing is creating a setup of some free MT4 indicators and trying to sell it for money.
If you search Google, you can easily find these indicators and download them for free. Avoiding a scam robot is easy: So, you ask, how do I avoid a scam binary broker? Most scam brokers operate unregulated with registrations in offshore zones.
Before you register at a broker, contact customer support via live chat. You can ask them all kinds of questions concerning withdrawals, price quotes and promotions.