Is Binary Options Trading a Scam? Is It a Safe Investment, or Should You Be Cautious?
Is Binary Options trading a scam? At the end of the day, no one wants to lose money after making an investment. Can you take a chance with this sort of trading?
Welcome to Passive Income For All. Today I am going to reveal some common pitfalls associated with the binary options trading system. You will get to see how it is closely watched by the relevant authorities in certain parts of the world.
I will show you exactly what goes on when one executes a trade. You will then have a fairly good idea of whether or not to jump in or run away!
First things first, an overview of binary options trading.
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WHAT IS BINARY OPTIONS TRADING ALL ABOUT?
When you are doing a binary options trade, you are predicting whether an index, stock, forex pair or a commodity would go up or down within a certain time frame.
You are not investing in any asset. You invest in an option, either a ‘put,’ option (price would go down) or a ‘call’ option (price would go up) on that asset.
If your prediction is correct, then you will earn a profit.
Sounds like betting on either RED or BLACK on the roulette table, and hoping for the best, doesn’t it?
As for the timeframe aspect, you can decide to make it as short as half a minute, or 5 minutes or even an hour long.
Some Pitfalls When It Comes To Binary Options
There are some legitimate software’s that you can try out. These ones usually offer you tools and indicators to improve binary options trading strategies.
However, I personally believe that despite these features, one will still be faced with some unavoidable shortfalls. Here are the three main ones.
Your Decision is Final
Forex pair, commodity, indexes are all influenced by market changes.
Should there be a turn of events in the market, you cannot change your mind. If for instance, you were to buy shares in a company, then you may still have a chance for it to recover over time.
With binary options trading, you are at the mercy of the timer. Your victory or defeat is determined by what transpires within that window period.
You DO NOT have a Share in Your Investment
Since you are ‘wagering’ on an option, you do not have any voting rights or benefits like you would have if you bought actual company interests.
In other words, you are not investing in any asset. This is not a Passive income vehicle.
Price Fluctuations may Have You at a Loss
At the time of buying, the price may be different from the underlying price.
How To Start Binary Options?- Watch Your Step
You will have to sign up with a legitimate broker. I advise extreme caution here, as there are tons of fraudsters out there that pretend to be the genuine deal.
The platforms that you should look out for, are the ones that allow you to register for free.
If you are a newbie, then there are some terminology and strategies that you need to familiarise yourself with before you actually start putting money down. These platforms should also offer you an opportunity to do paper trading to get started. Here is one such broker.
For this reason, in the initial stages, you should NOT be paying anything to start. That is why you need to be careful should you be approached by brokers who ask you to make a deposit, to access their ‘so-called’ magic money making system.
Can You Make Money with Binary Options?
Let me ask you this question, “Have you ever heard of a casino filing for bankruptcy?”
Have you ever wondered how much the binary options industry makes? According to sources at the Times of Israel, they make between $1billion and $10billion per annum.
On the same note, it was reported that 96% of the clients lose all of their money and only around 2% actually win.
I think that when you get started, it would help to have an advisor by your side.
Having someone who is already ‘in the game’ can make a difference.
They have the analytical skills to make an informed decision. However, no one can predict the market, unless you have a time machine to see the future. So basically, you can only go this far.
The other reason as to why one does not make money is the number of fraudulent operators that have mushroomed in recent times.
Binary Options Trading Scams-How to Recognize Them?
They operate along these lines:
- They have a professional looking website and claim to have reputable brokers.
- They ask you for a high registration fee like $250 before granting you access to test their platform.
- They claim that their trading signal software is capable of generating 80-90% accuracy and, they back it with,
- Fake testimonials and different company names.
- They ask for your telephone number. This allows the senior broker to pose as your long lost friend and milk you for every cent you own
.
Here are a couple of them that I reviewed and uncovered thus far;
BINARY OPTION TRADING- IS ON THE RADAR
Many relevant regulators, are now taking measures to ban this trading.
There have been warnings issued by central banks such as the Monetary Authority of Singapore.
The Time of Israel uncovered various unregulated operations and sought to take necessary action.
Even the US Securities and Exchange Commission(SEC) and the Commodity Futures Trading Commission(CFTC) issued a joint warning regarding unregulated binary options schemes.
Ever wondered why top brokers like JP Morgan, Goldman Sachs, or even Bank of America do not offer binary options trading as a service?
Can You Really Make Money With Binary Options Trading?
Platforms like IQ Option allow you to paper trade for as long as you want. They have some tutorials to teach you about relevant parameters and indicators when doing trades.
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My suggestion is to practice and practice till you feel comfortable. And do not forget the golden rule, never let your emotions dictate your actions. Especially, if you are on a losing streak, do not overtrade to recoup your losses.
I think that it is possible for one to make money trading in financial markets. One way is to follow traders that have a proven track record. Do your homework and see what their risk and record is.
Is Binary Options Trading a Scam?- My Final Opinion
Binary Options trading may not quantify itself as being a traditional scam. However, in my opinion, it certainly is not something that will make you money ALL THE TIME.
Paper trading for fun is the furthest that I will go.
You have a host of YouTube videos testifying wonderful things about Binary options trading.
You see them showing fancy cars, big mansions and dream holidays. If binary options trading really had a high success rate, then why would they want your money in the first place?
If you are making money in the markets, then why would there be the need to rely on another person’s capital?
As for your winnings, it is usually only a percentage of what you’ve invested. Essentially, you’re risking more and the gain is little.
If you are lucky enough to get a good broker and trading strategy, then maybe you can make money with binary options trading.
Bottom line: Many sites are offshore and feature brokers that are either unreputable or not regulated. You are wagering a sum in the ‘hope’ that you make a percentage of your return.
Binary options trading is not investing or trading, it’s gambling.
And it does not have the potential of offering you a passive income for life.
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You can make money online.
There are opportunities that have the potential of offering you a passive income.
It’s a matter of sifting through the bad ones to get to the golden nuggets.
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Would you do binary options trading? Have you tried it before? If so, what was your experience like?
Would love to hear your thoughts or comments that you may have.
Kind Regards and Take Care
Roopesh