Binary Options: Don’t Fall into the Traps set by Scammers and Fraudsters
Unfortunately for investors who learned the hard way, such lessons cannot undo the financial losses and emotional turmoil which comes with being ripped-off. Binary options scams and fraud have been a popular way for unscrupulous fraudsters and opportunists to steal from unsuspecting investors for some time now.
While this type of nefarious activity is not exclusive to binary options, it does seem pretty rife in this area of investing. Given the general risky nature of binaries, some investors do tend to let their guard down in pursuit of big gains.
How Legitimate is Binary Options?
Binary options trading is not a scam, per se. There are many out there who would refuse to class the practice as an investment, however. It is considered more of a gamble, which can play into the hands of tricksters posing as brokers and agents.
It can also give even those practicing legitimately a platform to bend the rules a little.
There is undoubtedly a high percentage of legitimate brokers that dwarf the number of con artists and fraudsters. It is important to know that sometimes, even the legitimate brokers can mismanage your expectations. For example, they could present a false proposition to you where they guarantee a considerable profit to you. Thus encouraging you to deposit sizeable amounts of money which you will invariably lose.
Without the knowledge required to see through these facile promises, any would be investor is in a position where they are blindly handing over money. To attain any success in binary options, you must first understand the complexities of how it all works. Most who lose money simply do not.
Is it any wonder why fraudsters would be interested in exploiting this for their own gain?
Can You Make Money in Binary Options?
Yes, you can be successful in binary options. Much like anything else in life, your success is directly proportionate to your knowledge and effort, however.
With binary options, you will need to dedicate serious time to learning the ins and outs of how markets work. There are simply too many variables and potential permutations involved to be able to casually predict the movement of an asset and expect to win. Are you aware of the geopolitical climate and how it may affect performance? Are you obsessively following the news, gorging on investment media?
If the answer is no, then you are not likely to be successful in this field. This information – and much more – is crucial to your knowledge. Without such information, you simply cannot be in a position to strengthen your awareness when it comes to predicting the movement of prices. You are left with a puncher’s chance, so to speak, and the odds will always be against you.
The same goes for understanding the parameters of binary trading, such as technical indicators, charts, calculations and the like.
Knowledge is Key
In order to avoid the traps and pitfalls set by scammers looking to take your money, you must understand, first, what you are doing with your money.
When investing any large amount of capital, you should always make the effort to gain ample knowledge of how the process works. If the average John Doe approached you on the street with an offer to turn the $50 in your wallet into $3,000, just like that, you would more than likely turn him down in an instant.
Why would you act differently online?
Binary options is not a scam, much like betting on horse racing is considered legitimate. It is regulated and considered a growing area of trading. However, due to the popularity of the practice online, more and more novice investors are plunging money into the hope of making more, just like that.
If you are serious about binary trading, do your homework. With enough knowledge, you should always be capable of smelling a rat.
About the writer: Jeremy Biberdorf is the owner & founder of the popular investing blog modestmoney.com. Check out his site for latest investing news and tips