Binary Options Safety Tips by Anonymous
1. Always and only sign up with trusted brokers – this is our first and most important safety tip. The binary options world has hundreds of brokers involved in it, out of which only a handful can be trusted. The vast majority of brokers will try to scam you by stealing your money. If you’re in the US, the problem is even bigger because no brokers are officially licensed except for CFTC-regulated exchanges such as Nadex and Cantor Exchange, but they are not compatible with most of the good signal services that are available and their system is quite different than that of other brokers.
2. Understand that in binary options there is a conflict of interests. The brokers, even the trusted ones, lose money when the trader is making money, and they make money when you are losing money. This is a very important thing you must always remember and the rest of our safety tips arise from this understanding.
3. Never let a broker trade for you – most brokers have some kind of managed account or AutoBot to automatically trade for its users. Never use such a service.
4. Never accept trading advice from brokers – they will to convince you to take their advice with promises of high profits. Don’t believe any of their advice.
5. Never be pressured to deposit more than you can afford to lose – This is a very important safety tip. Binary option trading is highly risky. There is a chance you WILL lose your money. Thus, you should never risk more than you can afford to lose. And the brokers will try to convince you to deposit more. If you deposited the minimum because that’s all you could afford, they will try to get more money out of you, claiming that it will make your chances of winning higher. This is bullshit.
6. Never agree to take any bonuses – the way the bonus works is that it affects the required the threshold of being able to withdraw money. So if you take a bonus, you will need to have a higher balance in order to withdraw funds than if you didn’t take a bonus. The higher the bonus, the less likely you will ever be able to reach the threshold required to withdraw.
7. Verification process – the verification process is an important part of signing up with binary option brokers. It is required in order for the broker to release your earnings to your bank account. If a broker allows you to trade before completing the verification process, this should raise a red flag. Maybe that broker does not intend to let you withdraw any funds and that’s why they don’t require that you verify your identity. We recommend that you complete the verification process BEFORE funding your account. Another issue with verification is that you should not give out too much information. For example, legit brokers will never ask you for your social security number, but identity thieves might. Let’s go over the verification requirements so that you know what to expect. First, they will require an ID to prove your identity. This could be a driving license, for example, and they will require that you cover up the social security number for security reasons. Next, they will need to know the source of the deposit, for example, a copy of the credit card or a swift copy if you deposit via wire. Finally, they will need a utility bill to prove your address. Never give out more than this information. And again – never give any information at all to untrusted brokers.
8. When choosing a signal service, make sure it is a reliable and trustworthy service. The best way to know that is by hearing it from someone you know who tried it. Searching for reviews on-line won’t help too much because even before the scammers release their scam services, they will upload many fake positive reviews. Another option is to be aware of some features that all scams share: a count-down spots left feature, too-good-to-be-true promises of making astronomical amounts of money, going on vacations, buying fancy cars and houses, etc., fake testimonials and screenshots of bank accounts and so on and so forth. A really good service will not try so hard to convince you to sign up because they know that legit services become viral by word of mouth.
9. If you’re just starting out with trading, it’s highly recommended that you begin trading with a FREE demo account, whether you are trading on your own or following a signal service. Only once you are confident in your ability to generate profits, go ahead and trade with your real account.
10. Last but not least is money management: this is a very broad and important issue, but let us simply it for you. Do not trade with more than %5-%10 of your total account balance. So if for example you deposit a minimum of $250, it’s recommended that each trade will be for no more than $25. This will make sure you will not quickly wipe out your account.