You’ve probably seen the flashy ads that say you can get rich quick with Binary Options Robots. While these claims may sound too good to be true, it isn’t impossible. Binary Options Robots are automated trading systems that make predictions on financial markets using complicated algorithms and mathematical formulas to determine whether an asset (such as a stock or currency) will go up or down in value over a certain period of time.
Introduced to the financial world just about 10 years ago, Binary Options Robots were made popular by companies such as SpotOption and TechFinancials. As might be expected, their popularity has led to some companies using them in ways that technically isn’t considered Robot trading. Instead these companies use bots in a way that is similar to the long-standing tradition of “pump and dump”.
This method usually involves giving free bot access to hundreds of people at once, which then goes into overdrive trading and buying and selling certain stocks or currencies. The company then purchases (or has already bought) these assets beforehand for very low prices, and when they are in high demand, the company sells their assets for very large amounts of money.
One example is a Binary Options Robot that was reported on by Business Insider in 2016 called Stock-Winner. This company offered users free access to their Binary Option Robot so long as they signed up with an affiliate link given by the company. Business Insider tested the software and found that it was very profitable on paper, but in reality people were nearly guaranteed to lose all of their invested money.
Another company, this time called SureTrader (now Ouroboros), supposedly made more than $2 million by inviting clients invest with them. When they did so, they found that SureTrader was actually a subsidiary of a much larger company called Swiss America Securities. This meant that SureTrader didn’t have to follow the same rules as other companies, which is why they were able to run such a successful scam.
In another example, 24Option tried claiming that their trading software could yield an average return on investment of 80% per month. This prompted the Australian Securities and Investments Commission (ASIC) to issue a warning against 24Option, as it is illegal for any company in Australia to make these claims without providing any evidence whatsoever.
So, are Binary Options Robots scams?
Well, it all depends on who you ask. There are some legitimate companies out there that do have good track records, such as Nadex and TradeThunder. However, in order to protect yourself from being taken in by a scam you should always do your research before making any investments in the online trading world.
Although the term “scam” has a variety of meanings, from giving incorrect information to entice you in to disappearing account balances – and even fraudulent trading recommendations – it can all be broken down into three broad categories. Furthermore, a specific broker may not be technically fraudulent in its actions; instead, it’s simply because the service available on the platform (such as unreliable uptime or failure to return money on time) makes them a firm that you ought to avoid.
In all of these situations, the issue isn’t with binary options as a concept; it’s with the broker. It’s a question of doing your homework before signing up for any platform. User reviews may be beneficial (if they’re real), but always remain critical about them – and never make a decision based on what you see on a broker’s Trader forums. Just take a closer look and you’ll discover that the forum is actually a spinoff of the broker’s website.
You can find out more about the different types of scams below:
1. Spam e-mails and SMS texts
“Hi, I see you opted in for Binary Options Trading”. You might think this is a sign that you’re joining a legitimate company – but look closely and you’ll realise this is simply a way of hooking new clients.
2. Fake news websites
These are designed to look like independent news sources, but they contain biased information that may be limited in scope or even manipulated so it supports the company’s agenda. It should be immediately clear to anyone who reads this information which assets are being recommended by the firm, and any other details should be looked at closely before investing.
3. Fake reviews
Make sure you look at the profiles of people who have left positive reviews online. If they’re part of a Binary Options firm, or are linked to someone in the company, then their feedback is likely to be biased or even made up entirely – so it can’t be relied upon when making an investment decision.
4. Social media ads
These types of scam often appear on social media platforms such as YouTube, where they’ll try to convince you to sign up for their services. They use logos designed to look like the real thing, but it’s easy enough to tell if they’re fake thanks to poor-quality graphics and incorrect branding.
5. Fake brokers
If you’re using one of these, you’ll never receive the account data, login details or security information necessary for trading. You can tell they don’t have any licenses because their services are available for free.
The most important thing is to avoid signing up with a company that has been accused of fraud before – as even if you manage to make money, there’s a very good chance you’ll end up losing it again.
A reputable company will be open and transparent about how it works, who runs the business and where its offices are located – both on its website and in other marketing materials.
Binary options are traded on various assets, each of which has a value associated with it. Traders can therefore buy them at one price and then sell them back to the broker when they’re worth more. However, this creates an opening for companies that want to cheat their customers out of money.
One example is where traders are paid high prices for their assets, only to find that the firm has manipulated information about its value. For example, traders might be shown news stories saying the worth of a particular asset is rising, but this could simply be false information published by the company itself – not an independent party.
Another situation where price manipulation can take place is when there are significant losses on the market – and instead of dealing with them, brokers will simply stop trading until the price rises again. They can then startup operations as normal, but pay traders lower prices than they should be getting – so it’s an easy way to trick them into generating more revenue for the company.
The best way to stay safe is to seek out a broker that allows traders to withdraw their money whenever they want. This is because you’ll be able to remove your funds and avoid any kind of manipulation in the process.
A Scam is a Scam, even if it Looks Official
It can be easy to mistake an entirely fraudulent business for a genuine one – after all, many trading companies have flashy websites, professional-looking offices and dozens of employees. However, this doesn’t mean you should let your guard down just because the business appears to have all the usual trappings of a legitimate Binary Options firm.
They’re staffed by people who are willing to lie in order to steal money from clients – so why would they suddenly change their stripes just to appear more legitimate?
Binary Options Scams are trying to convince you that it’s worth signing up with their company by promising returns of up to 97%.
This means that even if you do win money, there will be fees and commissions added on top – so the amount you actually bring home is much lower. It’s tempting, but remember that you’d probably be able to make even more money trading on your own.
The Biggest, Most Reliable Broker in the Industry?
Some scammers will try to convince you that they’re among the biggest Binary Options traders in the world – so signing up with them is the only way for you to become successful.
Regulation is still new in this industry, but the more scrupulous companies are likely to be upfront about who they work with and where their offices can be found.
These kinds of minimal service providers usually charge high commissions which also allow them to increase significantly per trade over time – basically meaning you will lose money quickly if your strategy is not flawless!
Legitimate companies should be able to clearly communicate how their service works, who is running the business and where its offices are located. Furthermore, a reputable company should give you the ability to withdraw your money at any time.
Remember that a scam is a scam no matter what industry it’s in – so don’t let appearances fool you!
Automated trading and robotic fraud
Automating these types of transactions introduces a lot of risk. When a trader hands over control of their trades to someone else, the level of danger rises dramatically. Many fraudulent binary option trades are made daily. Here are some reasons why.
- Novice traders
Automated trading software is frequently developed for novices or individuals who don’t have the time or knowledge to trade on their own. This group is more susceptible to fraud and may be targeted accordingly.
- It’s easy to place the blame on the trader
The first complaint is that the client learned all about the software after putting out a contract. The software isn’t exclusively known and used by professionals in the field; it’s also accessible to individuals who want to find answers for their specific issues or learn retailing skills. This isn’t unique to Microsoft Office; there are several other apps available. However,
- Trade management
If the trader has given someone else permission to manage his or her trade, it is very simple to claim that he or she has lost money.
Why trading yourself is better than using automated binary options trader
Binary options frauds are widespread. The popularity and profitability of binary options frauds are linked to the development of internet trading, which allows for the easy creation of phony websites that appear to be real brokerage businesses. If you want to trade binary options, there are a few investment scams you should be aware of, some of which are more common than others.
Online and over the phone are two of the most popular methods. In many situations, the dealer begins an internet search that returns a variety of results. For every actual firm, there may be up to 10 false websites pretending to be real. Many of these sites are intended to resemble brokers, with the same language, graphics, customer reviews, and social media personas. The scammers encourage you to join up for a trading platform and make a minimum deposit of 250 USD. What they do is simply take your money and disappear.
There are ” fraud robots” that try to defraud investors, but they don’t work. There are several red flags you should look for to determine whether a service is genuine or not. Lack of contact information for support, chronic negative reviews, short lead times, free download and restricted access to assets are all examples of bad indicators that suggest the company is fraudulent.
The program is based on complex mathematical algorithms to examine market information.
The reasy it is better to trade yourself than using a binary option robot is that you will be able to make a more accurate calculation of the money you want to invest and how much you can win.
Another shortcoming is that although some robots do allow for demo trading, every robot we encountered had only one type of contract (binary options on euro/dollar), and trades were almost always opened within minutes after the hour.
A third drawback is the lack of education that comes with automated trading. In fact, many binary options robots come without a tutorial or any other type of explanations about how to use them. Last but not least, most robots offer no technical support via email or live chat and this makes it hard for users to gain insight into their problems.
Binary options are a great way to get started with trading, but the lack of education involved in automated binary robots is certainly an issue. For more information, read this article on how to trade binary options profitably. Once you have all the required knowledge, you will be able to start making money off these automated systems.
How to Tell If a Binary Option Broker Is Cheating You
Knowing what you’re looking for makes it much simpler to identify fraudulent firms. But, “Is this too good to be true?” Consider if the answer is yes and ask whether it’s too good to be true. Be wary and read between the lines if someone claims that you’ll get $1,000 back in five minutes.
Verify your company’s credentials. You won’t find a broker on one of the prominent review sites if there’s little evidence that this is a genuine business, or if you can’t discover one listed. Avoid firms that provide signals or control services for binary options trading. The odds of an unsuccessful outcome are high in this field. On numerous forums, searching for “binary options scam” will turn up comments from dissatisfied customers. Searching the words “binary options broker” or “binary options trading bot” on Google is all it takes to determine if they’re frauds or not.
How not to become a victim of fraud
There are a few simple precautions you may take to avoid being taken advantage of by binary options frauds. To begin, verify that the broker, robot software, or signaling service you employ is trustworthy. The license allows it to be seen. Make certain you have a CySEC, CFTC, or another authorized license. Check their online ratings, reviews, and information on whether they have an uncontested track record of unethical conduct to see if they’re a good fit for you.
The next step is to see whether they offer a free demo account. If you can create a broker platform and trade with a demonstration account before putting money down, it’s an indication of whether this firm is real or not.
Be very cautious of solicitations from individuals who claim to be senior advisors. If they call you a “must-see” deal, don’t give them any money. These types of discussions are typical shams and you will be asked to create a vanishing supplement in order to get the money back.
It’s important not to stop trading in the market, because there are risks and fraudulent websites that must be avoided at all costs. You should pick a broker carefully and verify that it is a legitimate business with a positive online reputation so you don’t get ripped off later.