Monday, January 26, 2015

Binary Options: Broker Scams and Shady Dealings

Some people have a lot of disposable income and enjoy experimenting with different ways to double their money. They don't mind losing money because they are buying an experience rather than investing with the intent of gaining a significant profit. If you are one of these people, then binary options is the ideal investment for you.

However, if you don't view trading as a trip to the casino and hope to establish long-term investments, then binary options trading is not for you. No matter where you trade at, you won't generate a long term living, because brokers have no interest in your long-term success. Lets approach this topic from a logic-based standpoint.

Betting Against The Broker

If you remember nothing else, you should always keep in mind that binary options trading is not actually real exchange trading. When you put money into this industry, you are not purchasing shares of anything.

The only thing you are doing is betting against the broker. If your predictions are correct, then the broker loses their money and you get paid. If your predictions are incorrect, then the broker takes your money.

So what conclusion does that leave us with? --That the broker wants you to lose. You will never be able to reach your maximum earning potential in this form of trading. 

Binary Options

Though there are a few strategies that you can come up with in order to make better trading decisions, logically speaking, your winning streak will not last very long. At some point your account will need to be closed in order to keep the broker from going bankrupt.

If binary options trading was like the traditional trading, then there would be a real exchange taking place and you would not be betting against the broker--you would only be paying transaction fees. In this particular industry, brokers only succeed if you fail which brings about a huge conflict of interest and various scams.

Brokers and Their Scams

Take a moment to put yourself in the broker's shoes. Lets say that you have a trader who, over the course of a month's time, has continued a steady pace of investing. It seems that they have developed a winning strategy because their predictions are usually correct.

Not only are they investing more, but also the amounts they invest continue to rise as they win more. What was once a thousand or so has turned into tens of thousands worth of profit. They are gaining but your money (the brokers money) is quickly dwindling down and it is making your life extremely difficult.

Well, you have no ethics and little to no regulations and instead of continuing to lose your money to this person, you simply close their account--even before they have been paid out all of the money you owe them. They may continue to earn money in binary options trading, but it won't be from you.

And even, by chance, they were to try to sue you for stealing their money, chances are they won't win; you are under the same gaming commissions as a lot of casinos and they wouldn't want to establish that type of precedent.

And thus is the broker's way of life. They steal, launder money and hide behind offshore companies in order to stay ahead of their game. Some even own blogs so that they can villainize other brokers, only to eventually refer you to their website which is guilty of the exact same things.

While there might be some brokers that are legit, the vast majority of them are shady. You may be able to check out blogs that review binary options brokers, like this one linked, but you will never be sure if the reviews they write are actually legit or they were paid by the brokers themselves.

So What Is A Trader To Do?

The first step is recognizing that there is no long-term money making potential here. The odds are against you due to a tremendous conflict of interest. If you would like to make a legitimate investment, then it’s best to start by looking for real exchanges--something that offers you actual shares instead of an opponent with an agenda.

Binary options is not necessarily an investment fraud, however, it is extremely misleading. Is there money in it? Of course, but for how long and at what cost? You are putting your finances in the hands of individual's whose success is completely dependent upon your failure. Betting against the house is hardly ever a good idea.

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