Binary Options News And Scam Update 12-2020

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Contents

News Update And Scam Alert

Scam Alert December 2020

It seems that the lull in binary options scams we experienced over the summer has come to an end. A new round of products has recently hit the market and there is no limit to the lengths they will go to try and convince you of their legitimacy. The first to gain notoriety was Ataraxia7, a fail safe signal software that turned out to be just a fail. The software is being distributed via the internet and introduced to traders through forum posts. The posts are disguised as a friendly, informative and completely unbiased third party reviews but are obviously nothing more than SEO marketing BS. You can click here for a real review of Ataraxia7.

Two newer scams to hit the ether are BinaryApp 810 and Michael Freeman Signals. The Binary App 810 is another of the “free” software systems that you will be lucky to avoid. The scam is set up in much the same way as the Ataraxia7 scam in that it is being introduced through forum posts and other media. The posts are meant to be reassuring and soothing but in the end require deposit. “Insiders” claims to have used the software successfully and even to have won trading contests.

Michael Freeman on the other hand is another story entirely. Mike Freeman, operator of long time binary options website Mike’s Binary Options Channel, has turned to the dark side. For many years Mike was a proponent of safe binary trading but has now teamed up with the brokers. He is offering an “auto trader” free, with a deposit of course. According to many reports the win rates of the signals are below 50% and will wipe out your account very quickly. Shady brokers are always on the lookout for new and profitable ways to lure unsuspecting traders and what better way to do it than to use forums and gurus to do it. You get can the full low-down on Michael Freeman and his signals in the BinaryOptions.net forums.

Another new trick being used, and no doubt perfected, by serious black hat affiliates is to create false certifications. It is nothing new to find stamps and seals of approval all over any binary options broker, service or product but now the scammers are getting down right dirty. Some are claiming to be CySEC regulated, a move that gets them by for a while but usually ends up in a warning. Binaryfloor.com is only the latest to have received such a warning. CySEC states that this broker is not registered in Cyprus, has not applied for registration or is even actually located on Cyprus. Other scams, such as Ataraxia7 and NYStockOptions have to the extreme length to not only make a name for a supposed regulator, but have also created websites and electronic paper trails to support them.

Even as the scammers renew their efforts CySEC is being called to strict. A new article on ForexMagnates calls the regulator into question as the number of new brokers being approved has fallen drastically. One reason are increasingly tougher standards for the new brokers. Bowing under pressure from other EU regulators CySEC has recently raised capital requirements as well as others related to transparency and honest business practices. Notable EU members that may be pushing for even stricter measures include France, Luxembourg and Switzerland. These three have already applied sufficient pressure to put unregulated and fraudulent brokers such as FutureMarket right out of business.

Canadian regulators are also cracking down but it is unclear whether they are seeking to shut brokers down, or to have them register in Canada. Canada allows over the counter binary options, but only with registered brokers. Canadian authorities also regulate financial matters of this kind on a province to province basis so any broker who does receive approval may have to do so in each one. To date there are over 100 brokers on the warning list but it is apparent the only reason why is because they are all unregulated in Canada. Many prominent and well regulated brokers such as MarketsWorld and others are included on these lists.

There Is Good Binary Options News Too

On the bright side, regulated binary trading is gaining widespread acceptance in the EU. Several leading brokers have announced new partnerships over the past few months. These partnerships are with high profile athletic teams and more specifically football. That’s right friends, if you haven’t already noticed you soon will start seeing binary brands such as EZTrader, 24Options and others alongside your favorite teams in the Netherlands, Germany and Italy. These partnerships are by far one of the more positive signs that binary options brokerages are viable as businesses and entering the mainstream.

How to Succeed with Binary Options Trading 2020

Welcome to the largest expert guide to binary options and binary trading online. BinaryOptions.net has educated traders globally since 2020 and all our articles are written by professionals who make a living in the finance industry and online trading. We have close to a thousand articles and reviews to guide you to be a more profitable trader in 2020 no matter what your current experience level is. If you wish to discuss trading or brokers with other traders, we also have the world’s largest forum with over 20 000 members and lots of daily activity. Read on to get started trading today!

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What is a Binary Option and How Do You Make Money?

A binary option is a fast and extremely simple financial instrument which allows investors to speculate on whether the price of an asset will go up or down in the future, for example the stock price of Google, the price of Bitcoin, the USD/GBP exchange rate, or the price of gold. The time span can be as little as 60 seconds, making it possible to trade hundreds of times per day across any global market.

Before you place a trade you know exactly how much you stand to gain if your prediction is correct, usually 70-95% – if you invest $100 you will receive a credit of $170 – $195 on a successful trade. This makes risk management and trading decisions much more simple. The outcome is always a Yes or No answer – you either win it all or you lose it all – hence it being a “binary” option. The risk and reward is known in advance and this structured payoff is one of the attractions.

Exchange traded binaries are also now available, meaning traders are not trading against the broker.

To get started trading you first need a regulated broker account (or licensed). Pick one from the recommended brokers list, where only brokers that have shown themselves to be trustworthy are included. The top broker has been selected as the best choice for most traders.

If you are completely new to binary options you can open a demo account with most brokers, to try out their platform and see what it’s like to trade before you deposit real money.

Introduction Video – How to Trade Binary Options

These videos will introduce you to the concept of binary options and how trading works. If you want to know even more details, please read this whole page and follow the links to all the more in-depth articles. Binary trading does not have to be complicated, but as with any topic you can educate yourself to be an expert and perfect your skills.

Option Types

The most common type of binary option is the simple “Up/Down” trade. There are however, different types of option. The one common factor, is that the outcome will have a “binary” result (Yes or No). Here are some of the types available:

  • Up/Down or High/Low – The basic and most common binary option. Will a price finish higher or lower than the current price a the time of expiry.
  • In/Out, Range or Boundary – This option sets a “high” figure and “low” figure. Traders predict whether the price will finish within, or outside, of these levels (or ‘boundaries’).
  • Touch/No Touch – These have set levels, higher or lower than the current price. The trader has to predict whether the actual price will ‘touch’ those levels at any point between the time of the trade an expiry.
    Note with a touch option, that the trade can close before the expiry time – if the price level is touched before the option expires, then the “Touch” option will payout immediately, regardless of whether the price moves away from the touch level afterwards.
  • Ladder – These options behave like a normal Up/Down trade, but rather than using the current strike price, the ladder will have preset price levels (‘laddered’ progressively up or down).These can often be some way from the current strike price.As these options generally need a significant price move, payouts will often go beyond 100% – but both sides of the trade may not be available.

How to Trade – Step by Step Guide

Below is a step by step guide to placing a binary trade:

  1. Choose a broker – Use our broker reviews and comparison tools to find the best binary trading site for you.
  2. Select the asset or market to trade – Assets lists are huge, and cover Commodities, Stocks, Cryptocurrency, Forex or Indices. The price of oil, or the Apple stock price, for example.
  3. Select the expiry time – Options can expire anywhere between 30 seconds up to a year.
  4. Set the size of the trade – Remember 100% of the investment is at risk so consider the trade amount carefully.
  5. Click Call / Put or Buy / Sell – Will the asset value rise or fall? Some broker label buttons differently.
  6. Check and confirm the trade – Many brokers give traders a chance to ensure the details are correct before confirming the trade.

Choose a Broker

Options fraud has been a significant problem in the past. Fraudulent and unlicensed operators exploited binary options as a new exotic derivative. These firms are thankfully disappearing as regulators have finally begun to act, but traders still need to look for regulated brokers.

Note! Don’t EVER trade with a broker or use a service that’s on our blacklist and scams page, stick with the ones we recommend here on the site. Here are some shortcuts to pages that can help you determine which broker is right for you:

  • Compare all brokers – if you want to compare the features and offers of all recommended brokers.
  • Bonuses and Offers – if you want to make sure you get extra money to trade with, or other promotions and offers.
  • Low minimum deposit brokers – if you want to trade for real without having to deposit large sums of money.
  • Demo Accounts – if you want to try a trading platform “for real” without depositing money at all.
  • Halal Brokers – if you are one of the growing number of Muslim traders.

Asset Lists

The number and diversity of assets you can trade varies from broker to broker. Most brokers provide options on popular assets such as major forex pairs including the EUR/USD, USD/JPY and GBP/USD, as well as major stock indices such as the FTSE, S&P 500 or Dow Jones Industrial. Commodities including gold, silver, oil are also generally offered.

Individual stocks and equities are also tradable through many binary brokers. Not every stock will be available though, but generally you can choose from about 25 to 100 popular stocks, such as Google and Apple. These lists are growing all the time as demand dictates.

The asset lists are always listed clearly on every trading platform, and most brokers make their full asset lists available on their website. This information is also available within our reviews, including currency pairs.

Expiry Times

The expiry time is the point at which a trade is closed and settled. The only exception is where a ‘Touch’ option has hit a preset level prior to expiry. The expiry for any given trade can range from 30 seconds, up to a year. While binaries initially started with very short expiries, demand has ensured there is now a broad range of expiry times available. Some brokers even give traders the flexibility to set their own specific expiry time.

Expiries are generally grouped into three categories:

  • Short Term / Turbo – These are normally classed as any expiry under 5 minutes
  • Normal – These would range from 5 minutes, up to ‘end of day’ expiries which expire when the local market for that asset closes.
  • Long term – Any expiry beyond the end of the day would be considered long term. The longest expiry might be 12 months.

Regulation

While slow to react to binary options initially, regulators around the world are now starting to regulate the industry and make their presence felt. The major regulators currently include:

  • Financial Conduct Authority (FCA) – UK regulator
  • Cyprus Securities and Exchange Commission (CySec) – Cyprus Regulator, often ‘passported’ throughout the EU, under MiFID
  • Commodity Futures Trading Commission (CFTC) – US regulator
  • Australian Securities and Investments Commission (ASIC)

There are also regulators operating in Malta and the Isle of Man. Many other authorities are now taking a keen a interest in binaries specifically, notably in Europe where domestic regulators are keen to bolster the CySec regulation.

Unregulated brokers still operate, and while some are trustworthy, a lack of regulation is a clear warning sign for potential new customers.

Recently, ESMA (European Securities and Markets Authority) moved to ban the sale and marketing of binary options in the EU. The ban however, only applies to brokers regulated in the EU. This leaves traders two choices to keep trading: Firstly, they can trade with an unregulated firm – this is extremely high risk and not advisable. Some unregulated firms are responsible and honest, but many are not.

The second choice is to use a firm regulated by bodies outside of the EU. ASIC in Australia are a strong regulator – but they will not be implementing a ban. This means ASIC regulated firms can still accept EU traders. See our broker lists for regulated or trusted brokers in your region.

There is also a third option. Traders who register as ‘professional’ are exempt from the new ban. The ban is only designed to protect ‘retail’ investors. A professional trader can continue trading at EU regulated brokers such as IQ Option. To be classed as professional, an account holder must meet two of these three criteria:

  1. Open 10 or more trades per quarter, of €150 or more.
  2. Have assets of €500,000 or more
  3. Have worked for two years in a financial firm and have experience of financial products.

Yes, trading binary options is legal in the US. The US binary options market is strictly regulated. These safeguards are in place to protect US residents, but trading is absolutely legal.

What is illegal, is for non-US based brokers (‘off shore’ brokers) to solicit US residents. It is this which has resulted in some binary options brokers receiving heavy fines, and the majority not accepting traders based in the USA. There are however, a number of options for US traders, where they can trade legally, at reputable brokers, fully regulated by the CFTC.

The US Binary options brokers list above, is tailored to display only brokers that accept US clients. Nadex and CBOE remain the only regulated exchanges however. The Nadex offering delivers binary options that mimic futures contracts more familiar to US pattern day traders.

Binary options trading in the USA

Most binary options brokers operate accounts in USD. This is seen as the ‘global currency’ within the binary options industry and therefore US clients are free to trade with funds in their local currency.

Binary options brokers will generally have their trading platform open when the market of the underlying asset is open. So if trading the NYSE, Nasdaq, DOW or S&P, the assets will be open to trade during the same hours as those markets are open. Any moves by the Federal reserve for example, will feed into binary markets immediately, just as you would expect.

Forex trading has no central market, and as such USD pairs can generally be traded around the clock for 5 days a week. Markets in Hong Kong, Europe and the US, mean that foreign currency can be traded 24 hours a day.

US Traders also have the option of using exchange traded binary options, or an over the counter (OTC) broker. So binary options trading in the US, generally delivers the same level of choice trading in Europe, but in a more closely regulated market.

Some of the links to third party websites included on our website are affiliate links. This means that we may receive commission or a fee if you click on a link that takes you through to a third party website or if you purchase a product from a third party website.

Strategies and Guides

We have a lot of detailed guides and strategy articles for both general education and specialized trading techniques. Below are a few to get you started if you want to learn the basic before you start trading. From Martingale to Rainbow, you can find plenty more on the strategy page.

Signals and Other Services

For further reading on signals and reviews of different services go to the signals page.

Beginners Guides

If you are totally new to the trading scene then watch this great video by Professor Shiller of Yale University who introduces the main ideas of options:

Education for beginners:

Types of Trades

How to Set Up a Trade

The ability to trade the different types of binary options can be achieved by understanding certain concepts such as strike price or price barrier, settlement, and expiration date. All trades have dates at which they expire.

When the trade expires, the behaviour of the price action according to the type selected will determine if it’s in profit (in the money) or in a loss position (out-of-the-money). In addition, the price targets are key levels that the trader sets as benchmarks to determine outcomes. We will see the application of price targets when we explain the different types.

There are three types of trades. Each of these has different variations. These are:

Let us take them one after the other.

High/Low

Also called the Up/Down binary trade, the essence is to predict if the market price of the asset will end up higher or lower than the strike price (the selected target price) before the expiration. If the trader expects the price to go up (the “Up” or “High” trade), he purchases a call option. If he expects the price to head downwards (“Low” or “Down”), he purchases a put option. Expiry times can be as low as 5 minutes.

Please note: some brokers classify Up/Down as a different types, where a trader purchases a call option if he expects the price to rise beyond the current price, or purchases a put option if he expects the price to fall below current prices. You may see this as a Rise/Fall type on some trading platforms.

In/Out

The In/Out type, also called the “tunnel trade” or the “boundary trade”, is used to trade price consolidations (“in”) and breakouts (“out”). How does it work? First, the trader sets two price targets to form a price range. He then purchases an option to predict if the price will stay within the price range/tunnel until expiration (In) or if the price will breakout of the price range in either direction (Out).

The best way to use the tunnel binaries is to use the pivot points of the asset. If you are familiar with pivot points in forex, then you should be able to trade this type.

Touch/No Touch

This type is predicated on the price action touching a price barrier or not. A “Touch” option is a type where the trader purchases a contract that will deliver profit if the market price of the asset purchased touches the set target price at least once before expiry. If the price action does not touch the price target (the strike price) before expiry, the trade will end up as a loss.

A “No Touch” is the exact opposite of the Touch. Here you are betting on the price action of the underlying asset not touching the strike price before the expiration.

There are variations of this type where we have the Double Touch and Double No Touch. Here the trader can set two price targets and purchase a contract that bets on the price touching both targets before expiration (Double Touch) or not touching both targets before expiration (Double No Touch). Normally you would only employ the Double Touch trade when there is intense market volatility and prices are expected to take out several price levels.

Some brokers offer all three types, while others offer two, and there are those that offer only one variety. In addition, some brokers also put restrictions on how expiration dates are set. In order to get the best of the different types, traders are advised to shop around for brokers who will give them maximum flexibility in terms of types and expiration times that can be set.

Mobile Apps

Trading via your mobile has been made very easy as all major brokers provide fully developed mobile trading apps. Most trading platforms have been designed with mobile device users in mind. So the mobile version will be very similar, if not the same, as the full web version on the traditional websites.

Brokers will cater for both iOS and Android devices, and produce versions for each. Downloads are quick, and traders can sign up via the mobile site as well. Our reviews contain more detail about each brokers mobile app, but most are fully aware that this is a growing area of trading. Traders want to react immediately to news events and market updates, so brokers provide the tools for clients to trade wherever they are.

Trading FAQ

What Does Binary Options Mean?

“Binary options” means, put very simply, a trade where the outcome is a ‘binary’ Yes/No answer. These options pay a fixed amount if they win (known as “in the money”), but the entire investment is lost, if the binary trade loses. So, in short, they are a form of fixed return financial options.

How Does a Stock Trade Work?

Steps to trade a stock via a binary option;

  1. Select the stock or equity.
  2. Identify the desired expiry time (The time the option will end).
  3. Enter the size of the trade or investment
  4. Decide if the value will rise or fall and place a put or call

The steps above will be the same at every single broker. More layers of complexity can be added, but when trading equities the simple Up/Down trade type remains the most popular.

Put and Call Options

Call and Put are simply the terms given to buying or selling an option. If a trader thinks the underlying price will go up in value, they can open a call. But where they expect the price to go down, they can place a put trade.

Different trading platforms label their trading buttons different, some even switch between Buy/Sell and Call/Put. Others drop the phrases put and call altogether. Almost every trading platform will make it absolutely clear which direction a trader is opening an option in.

Are Binary Options a Scam?

As a financial investment tool they in themselves not a scam, but there are brokers, trading robots and signal providers that are untrustworthy and dishonest.

The point is not to write off the concept of binary options, based solely on a handful of dishonest brokers. The image of these financial instruments has suffered as a result of these operators, but regulators are slowly starting to prosecute and fine the offenders and the industry is being cleaned up. Our forum is a great place to raise awareness of any wrongdoing.

These simple checks can help anyone avoid the scams:

  • Marketing promising huge returns. This is clear warning sign. Binaries are a high risk / high reward tool – they are not a “make money online” scheme and should not be sold as such. Operators making such claims are very likely to be untrustworthy.
  • Know the broker. Some operators will ‘funnel’ new customer to a broker they partner with, so the person has no idea who their account is with. A trader should know the broker they are going to trade with! These funnels often fall into the “get rich quick” marketing discussed earlier.
  • Cold Calls. Professional brokers will not make cold calls – they do not market themselves in that way. Cold calls will often be from unregulated brokers interested only in getting an initial deposit. Proceed extremely carefully if joining a company that got in contact this way. This would include email contact as well – any form of contact out of the blue.
  • Terms and Conditions. When taking a bonus or offer, read the full terms and conditions. Some will include locking in an initial deposit (in addition to the bonus funds) until a high volume of trades have been made. The first deposit is the trader’s cash – legitimate brokers would not claim it as theirs before any trading. Some brokers also offer the option of cancelling a bonus if it does not fit the needs of the trader.
  • Do not let anyone trade for you. Avoid allowing any “account manager” to trade for you. There is a clear conflict of interest, but these employees of the broker will encourage traders to make large deposits, and take greater risks . Traders should not let anyone trade on their behalf.

Which Are The Best Trading Strategies?

Binary trading strategies are unique to each trade. We have a strategy section, and there are ideas that traders can experiment with. Technical analysis is of use to some traders, combined with charts, indicators and price action research. Money management is essential to ensure risk management is applied to all trading. Different styles will suit different traders and strategies will also evolve and change.

There is no single “best” strategy. Traders need to ask questions of their investing aims and risk appetite and then learn what works for them.

Are Binary Options Gambling?

This will depend entirely on the habits of the trader. With no strategy or research, then any short term investment is going to win or lose based only on luck. Conversely, a trader making a well researched trade will ensure they have done all they can to avoid relying on good fortune.

Binary options can be used to gamble, but they can also be used to make trades based on value and expected profits. So the answer to the question will come down to the trader.

Advantages of Binary Trading

The main benefit of binaries is the clarity of risk and reward and the structure of the trade.

Minimal Financial Risk

If you have traded forex or its more volatile cousins, crude oil or spot metals such as gold or silver, you will have probably learnt one thing: these markets carry a lot of risk and it is very easy to be blown off the market. Things like leverage and margin, news events, slippages and price re-quotes, etc can all affect a trade negatively. The situation is different in binary options trading. There is no leverage to contend with, and phenomena such as slippage and price re-quotes have no effect on binary option trade outcomes. This reduces the risk in binary option trading to the barest minimum.

Flexibility

The binary options market allows traders to trade financial instruments spread across the currency and commodity markets as well as indices and bonds. This flexibility is unparalleled, and gives traders with the knowledge of how to trade these markets, a one-stop shop to trade all these instruments.

Simplicity

A binary trade outcome is based on just one parameter: direction. The trader is essentially betting on whether a financial asset will end up in a particular direction. In addition, the trader is at liberty to determine when the trade ends, by setting an expiry date. This gives a trade that initially started badly the opportunity to end well. This is not the case with other markets. For example, control of losses can only be achieved using a stop loss. Otherwise, a trader has to endure a drawdown if a trade takes an adverse turn in order to give it room to turn profitable. The simple point being made here is that in binary options, the trader has less to worry about than if he were to trade other markets.

Greater Control of Trades

Traders have better control of trades in binaries. For example, if a trader wants to buy a contract, he knows in advance, what he stands to gain and what he will lose if the trade is out-of-the-money. This is not the case with other markets. For example, when a trader sets a pending order in the forex market to trade a high-impact news event, there is no assurance that his trade will be filled at the entry price or that a losing trade will be closed out at the exit stop loss.

Higher Payouts

The payouts per trade are usually higher in binaries than with other forms of trading. Some brokers offer payouts of up to 80% on a trade. This is achievable without jeopardising the account. In other markets, such payouts can only occur if a trader disregards all rules of money management and exposes a large amount of trading capital to the market, hoping for one big payout (which never occurs in most cases).

Accessibility

In order to trade the highly volatile forex or commodities markets, a trader has to have a reasonable amount of money as trading capital. For instance, trading gold, a commodity with an intra-day volatility of up to 10,000 pips in times of high volatility, requires trading capital in tens of thousands of dollars. However, binary options has much lower entry requirements, as some brokers allow people to start trading with as low as $10.

Disadvantages of Binary Trading

Reduced Trading Odds for Sure-Banker Trades

The payouts for binary options trades are drastically reduced when the odds for that trade succeeding are very high. While it is true that some trades offer as much as 85% payouts per trade, such high payouts are possible only when a trade is made with the expiry date set at some distance away from the date of the trade. Of course in such situations, the trades are more unpredictable.

Lack of Good Trading Tools

Some brokers do not offer truly helpful trading tools such as charts and features for technical analysis to their clients. Experienced traders can get around this by sourcing for these tools elsewhere; inexperienced traders who are new to the market are not as fortunate. This is changing for the better though, as operators mature and become aware of the need for these tools to attract traders.

Limitations on Risk Management

Unlike in forex where traders can get accounts that allow them to trade mini- and micro-lots on small account sizes, many binary option brokers set a trading floor; minimum amounts which a trader can trade in the market. This makes it easier to lose too much capital when trading binaries. As an illustration, a forex broker may allow you to open an account with $200 and trade micro-lots, which allows a trader to expose only acceptable amounts of his capital to the market. However, you will be hard put finding many binary brokers that will allow you to trade below $50, even with a $200 account. In this situation, four losing trades will blow the account.

Cost of Losing Trades

Unlike in other markets where the risk/reward ratio can be controlled and set to give an edge to winning trades, the odds of binary options tilt the risk-reward ratio in favour of losing trades.

Trade Corrections

When trading a market like the forex or commodities market, it is possible to close a trade with minimal losses and open another profitable one, if a repeat analysis of the trade reveals the first trade to have been a mistake. Where binaries are traded on an exchange, this is mitigated however.

Spot Forex vs Binary Trading

These are two different alternatives, traded with two different psychologies, but both can make sense as investment tools. One is more TIME centric and the other is more PRICE centric. They both work in time/price but the focus you will find from one to the other is an interesting split. Spot forex traders might overlook time as a factor in their trading which is a very very big mistake. The successful binary trader has a more balanced view of time/price, which simply makes him a more well rounded trader. Binaries by their nature force one to exit a position within a given time frame win or lose which instills a greater focus on discipline and risk management. In forex trading this lack of discipline is the #1 cause for failure to most traders as they will simply hold losing positions for longer periods of time and cut winning positions in shorter periods of time. In binary options that is not possible as time expires your trade ends win or lose. Below are some examples of how this works.

Above is a trade made on the EUR/USD buying in an under 10 minute window of price and time. As a binary trader this focus will naturally make you better than the below example, where a spot forex trader who focuses on price while ignoring the time element ends up in trouble. This psychology of being able to focus on limits and the dual axis will aid you in becoming a better trader overall.

The very advantage of spot trading is its very same failure – the expansion of profits exponentially from 1 point in price. This is to say that if you enter a position that you believe will increase in value and the price does not increase yet accelerates to the downside, the normal tendency for most spot traders is to wait it out or worse add to the losing positions as they figure it will come back. The acceleration in time to the opposite desired direction causes most spot traders to be trapped in unfavourable positions, all because they do not plan time into their reasoning, and this leads to a complete lack of trading discipline.

The nature of binary options force one to have a more complete mindset of trading off both Y = Price Range and X = Time Range as limits are applied. They will simply make you a better overall trader from the start. Conversely on the flip side, they by their nature require a greater win rate as each bet means a 70-90% gain vs a 100% loss. So your win rate needs to be on average 54%-58% to break even. This imbalance causes many traders to overtrade or revenge trade which is just as bad as holding/adding to losing positions as a spot forex trader. To successfully trade you need to practice money management and emotional control.

In conclusion, when starting out as a trader, binaries might offer a better foundation to learn trading. The simple reasoning is that the focus on TIME/PRICE combined is like looking both ways when crossing the street. The average spot forex trader only looks at price, which means he is only looking in one direction before crossing the street. Learning to trade taking both time and price into consideration should aid in making one a much overall trader.

Binary Options News And Scam Update 12-2020

It’s marketed as an investment opportunity and a route to easy money, but binary options trading can be more like betting on a coin flip without any protection for your funds. Binary options trading through regulated platforms can offer ways to bet on market movement while moderating risk. Unfortunately, the binary options landscape is full of fraud. Many investors lose money—sometimes even their entire life savings—to con artists who trick them into believing binary options are their ticket to financial gain.

Binary Options Trading

With a binary options trading strategy, the holder is effectively betting on whether the price of a particular index or asset will rise or fall versus a certain price level. If you bet right, you are paid a fixed rate of return. If the market doesn’t hit your price, you lose your investment. It’s an all-or-nothing proposition. The binary option can be a bet on the price of an index, stock, currency or some other asset. However, the binary option buyer never actually owns the underlying investment asset.

In the U.S., the Securities and Exchange Commission and Commodity Futures Trading Commission regulate binary options platforms and trading. A joint SEC-CFTC investor alert explains the win-or-lose nature of binary options trading, and cautions that not all internet-based trading platforms comply with U.S. regulatory requirements. The alert also notes that trading platforms may “overstate the average return on investment by advertising a higher average return on investment than a customer should expect, given the payout structure.”

Binary Options Fraud

The rise of illegally operated, internet-based trading platforms has opened up new avenues for scammers, and fraudulent binary options platforms are particularly common. Investors are lured into trying their hand at binary options trading, using “demo,” accounts or a modest initial investment stake. Trading takes place through platforms that seem legitimate, but are in fact are nothing but smoke and mirrors. One consistent element of these fraudulent platforms: they almost always show the investor making money—and lots of it. As “profits” grow, the scammers ask, or even demand, that you deposit more and more money.

Then the problems begin. In some cases, a fraudulent binary trader simply won’t credit or reimburse their option holders as promised. In other words, they’ll take the money and run. Or they may tell the option holder to send funds for payment of taxes or other fees in order to receive the option “profits.” Internet-based traders may also harvest credit card numbers and other personal information useful for committing identity theft.

There are also follow-up scams. Once victims have lost money on binary options, they may be contacted with false promises to help recover their funds—for an up-front fee. Scammers may even pose as government representatives claiming that the scam victim owes fines for illegal trading.

If someone contacts you claiming to be affiliated with a government agency and pressures or threatens you into sending money, treat these as warning signs of an impostor who is trying to work a scam. Be aware that the IRS will notify you by mail first if you owe money, not by phone or email, and the SEC does not charge money to help people recover investment losses.

To protect yourself from internet-based binary options scams, consider these tips:

  • Be wary of any internet trading platforms that appear to originate in foreign countries. These platforms may not be complying with regulatory requirements in your own country—and may be fraudulent.
  • Learn to spot the signs in binary options scams. The Financial Industry Regulatory Authority (FINRA), Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and Canada’s Investment Industry Regulatory Organization (IIROC) have all issued alerts about the dangers of binary options scams.
  • Call FINRA’s helpline in the U.S. to ask about potential binary options scams: (240) 386-HELP (4357).
  • If considering a purchase of binary options, carefully research the trading platform before you buy.
    • Check with CFTC to see if the binary options trading platform is a “designated” market. Call: 1-866-FON-CFTC.
    • Check with SEC’s EDGAR system to see if the binary options offering is registered with SEC, and also whether the platform is registered as an exchange. Call: 1-800-SEC-0330.
    • Use FINRA’s BrokerCheck ® to see if binary options brokers are registered.
    • According to the IIROC, in Canada” “Binary options cannot be offered or sold to retail investors in Canada.” Anyone offering such options in Canada should be reported at once to provincial securities commissions.
  • Don’t provide copies of your credit card, driver’s license, or other sensitive documents online.
  • Never pay up front money to individuals who may contact you, claiming they can help you recover an investment loss.
  • Check BBB.org’s Scam Tracker SM to read reports on how scammers operate.
  • If you think you may have encountered a binary options scam, you can file a complaint or a tip with the FBI Internet Crime Complaint Center at ic3.gov.

The BBB of Metro New York contributed to this article. Thanks to FINRA for their review.

Binarium – Is It a Scam?

Stop! It’s a Scam! Your money is not safe if you are trading with this unregulated, off-shore broker.

Binarium – DO NOT TRADE WITH THIS PROVIDER

Binarium is a broker that offers trading in binary options via a web-based platform. While the website itself doesn’t really give much information about the account types available, when you sign-up, you get to choose from 5 different account types.

The basic account is called the Start, which has a minimum deposit requirement of $5, has a minimum trade size of just $1 and has a payout of as much as 90%. The other accounts are the Standard (with a minimum deposit requirement of $100), Business (with a minimum deposit of $50), Premium (with a minimum deposit of $2,000) and VIP (with a minimum deposit of $5,000).

Try these regulated brokers if you want to start trading cryptocurrencies

Plus500 is a FTSE 250 listed brokerage providing online trading services in CFDs, across 2,000+ securities and multiple asset classes.

Founded: 2020

Regulations: Unregulated

Languages: English, German, Russian, Turkish, Thai, Vietnamese, Italian, Polish, Spanish, Ukrainian

Deposit Methods: Visa, MasterCard, Bank Wire, Neteller, Yandex, QIWI, WebMoney.

Minimum Deposit: $5

Free Demo Account: Yes

Number of Assets: N/A

Types of Assets: Currencies, Cryptocurrencies, Commodities

Trading Accounts and Conditions

Binarium is a broker that offers trading in binary options via a web-based platform. While the website itself doesn’t really give much information about the account types available, when you sign-up, you get to choose from 5 different account types.

The basic account is called the Start, which has a minimum deposit requirement of $5, has a minimum trade size of just $1 and has a payout of as much as 90%. The other accounts are the Standard (with a minimum deposit requirement of $100), Business (with a minimum deposit of $50), Premium (with a minimum deposit of $2,000) and VIP (with a minimum deposit of $5,000).

Upon going through the trading terms, we found nothing that was seriously alarming, which is something that makes this broker seem legitimate.

Binarium – Advantages

Here are the advantages of trading on Binarium:

High Payouts

When we checked the EURUSD binary option, we found that the payouts reached as high as 90%, which is quite high by industry standards, and beneficial for traders.

The Turbo options offer even higher returns.

Low Minimum Deposit Requirement and Bet Size

Binarium allows you to start trading with a minimum deposit of just $5, which is actually one of the lowest amounts in the industry. The minimum bet size of $1 is also one of the least in the market. This is a big plus, as it means that you can manage risk much better.

Demo Account Available

Binarium offers a demo account to its clients so that you can test the trading conditions before you start putting in money. This is another big plus, since binary options brokers generally don’t offer this facility.

Range of Deposit and Withdrawal Options

Binarium offers its clients a range of deposit and withdrawal options. It supports the standard credit and debit options of MasterCard and Visa and traditional bank wire transfers. It also supports alternate options such as Neteller, WebMoney, Yandex and QIWI.

When we inspected the payment methods, we found nothing troubling about the broker’s offerings.

Binarium – Disadvantages

While Binarium has a number of great advantages, there are some serious disadvantages that make us a little wary of this broker. Here is the list:

Unregulated

The biggest issue we have with Binarium is that it is not regulated. The broker states on its website that it is owned and operated by a company called Binarium Ltd. This company is registered in St. Vincent and the Grenadines (SVG), but also has offices in Cyprus, Latvia and Ukraine.

The problem is that brokers in SVG need only to register with the local Financial Services Authority (FSA), which clearly states that it does not regulate binary options brokers.

While the company has claimed to have offices in various European countries, this claim is in all probability false, since binary options trading is not permitted in the EU.

Brokerages that operate in the European Union are subject to stringent regulations, and those that are not being regulated by financial agencies are basically operating illegally in the region.

Regulated brokers are required to have substantial capital adequacy requirements, ensure that their clients’ funds are kept separate from the broker’s, issue regular reports of all transactions on their platforms, provide their customers with negative balance protection, and so on.

Since unregulated brokers do not offer any of these facilities, your investments are actually susceptible to substantial risk. And since Binarium is proven to be an unregulated broker, we would advise you not to trade with Binarium.

Plus500

Plus500 is a FTSE 250 listed brokerage providing online trading services in CFDs, across 2,000+ securities and multiple asset classes.

AvaTrade

The company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders.

CNMV Blacklist

Binarium has been blacklisted by the CNMV (Comision Nacional del Mercado de Valores), the Spanish financial regulatory authority, as a possible scammer.

This is because the broker offers trading options in European countries – including Spain – but it is not regulated in any way under any EU nation’s laws. What this basically means is that Binarium is operating illegally in these countries.

Thus, it would be best if you not invest your money with this broker.

Simplistic Trading Platform

It is common for binary options brokers to offer a simplistic web-based trading platform, and Binarium is no exception.

It has to be said that the broker’s trading interface is easy to use and is equipped with several market indicators. However, it is very simplistic and does not have the more advanced tools that other platforms such as the MetaTrader 4 support, such as automated trading, charting options or even analytics tools to assess the markets.

Conclusion

The challenge with Binarium is that there are a number of things that it does right. It’s terms of trade are very trader-friendly. It offers a range of deposit and withdrawal options that are above-board. It has high payouts and low bets, and it offers its customers a demo account to try practice before they put in real money.

However, there are some serious red flags because of which we would strongly advise you not to trade with Binarium. The broker claims to have trading offices in different countries in Europe, but it is not regulated by a single European financial authority.

This in itself would be worrisome, but the seriousness of the situation is made worse because the broker has been blacklisted by the Spanish financial authority, the CNMV, as a possible scammer.

Therefore, despite the fact that this broker does have some really great advantages, the fact that it is not operating legally is a huge warning to all traders to stay away from Binarium.

How to Avoid Forex Trading Scams in 2020

Forex markets trade trillions of dollars a day. Traders around the globe are always looking for the best broker to trade forex, CFDs, binary options, stocks, cryptocurrencies, etc. With new forex brokers popping up constantly, determining the legitimacy of a broker can be a real challenge. As a consumer, it is vital to research a company before depositing money to trade. At ForexBrokers.com, it’s our mission to assist you as much as possible with that research.

Most Trusted Forex Brokers Comparison

Taken from our forex broker comparison tool, here’s a comparison of the must trusted forex brokers.

Feature IG
Visit Site
Swissquote CMC Markets Saxo Bank
Trust Score 99 99 99 98
Year Founded 1974 1996 1989 1992
Publicly Traded (Listed) Yes Yes Yes No
Bank Yes Yes No Yes
Tier-1 Licenses 6 4 4 6
Tier-2 Licenses 3 1 2 1
Tier-3 Licenses 1 0 0 0
Authorised in the European Union Yes Yes Yes Yes

Questions to ask to avoid a forex trading scam

  • Is the broker regulated?
  • If regulated, how trustworthy is the regulatory body?
  • Is the broker offering profits or rewards for opening an account?
  • Is the broker offering a cash bonus for opening an account?
  • Is the broker offering automatic trades or signals to guarantee profits?
  • Is any credible information about the company included on its website, such as company history, financials, headquarters’ address, or similar?
  • If awards are cited, can I verify their authenticity?
  • If a big corporate sponsorship is promoted (e.g. athlete sponsorship), am I doing my due dilligence to ensure the company can be trusted?

1) Is the broker regulated?

Unregulated brokers do not have to report to a governing body. This means that if they scam you in any way, whether it be “glitches” or “malfunctions” causing sever slippage in their system, or you go to make a withdrawal and they don’t process it (steal your money), you are out of luck. Beyond posting a bad review online, there is little you can do because these brokers have no legal authority to answer to.

How do I check if a broker is regulated? The easiest way to check a broker’s registration is to look for it at the bottom of the website. The picture below is the bottom of 12Trader, a broker we recommend avoiding. You’ll notice that nowhere in this picture is a regulatory body mentioned. The “about us” pages on the site link to an account login prompt. Nowhere on the site is there any mention of regulation or company history. All of these warning signs should make you cautious.

Now let’s look at the bottom of the homepage of City Index, a trusted and regulated broker.

You will notice 1) the company specifically warns of the risks involved in trading CFDs, 2) the company is registered in England and Wales and has posted an address, and 3) the company is authorized and regulated by the Financial Conduct Authority, and has posted a registration number.

Conclusion: A regulated broker is required to include proper risk disclaimers and regulatory information at the bottom of all their website pages. To make it easy for investors, ForexBrokers.com includes a Trust Score for each broker, which assesses overall trustworthiness based on where the broker is regulated and its history as a firm.

2) If regulated, how trustworthy is the regulatory body?

Some scam brokers claim to be regulated and registered by a governing body that does not monitor or regulate forex companies.

For example, let’s look at Evolve Markets.

The disclosures at the bottom of the homepage give the appearance of a regulated broker. There is a warning of the risks of trading CFDs, and there is a legal section. Upon further examination of the legal section, you’ll notice that while the firm is registered as an international broker company in St. Vincent & the Grenadines, it is not regulated.

This statement from St. Vincent & the Grenadines shows there is a warning against false claims of registration or license.

How do I know what regulatory bodies are legitimate?

Forex brokers that are regulated in a major hub are always more trustworthy. Brokers in emerging hubs can also be trustworthy, but caution is warranted. Based on our annual study of regulatory trustworthiness, here is a list of the regulatory bodies we track and how trustworthy each one is:

  • FCA Regulated – Financial Conduct Authority – United Kingdom – (Great)
  • CySEC Regulated – Cyprus Securities & Exchange Commission – Cyprus (OK)
  • ASIC Regulated – Australian Securities & Investment Commission – Australia (Good)
  • SFC Authorized – Securities Futures Commission – Hong Kong (Good)
  • MAS Authorized – Monetary Authority of Singapore – Singapore (Good)
  • FSA Authorized – Financial Services Agency – Japan (Good)
  • IIROC Authorized – Investment Industry Regulatory Organization of Canada – Canada (Good)
  • FINMA Authorized – Swiss Financial Market Supervisory Authority – Switzerland (Good)
  • FMA Authorized – Financial Markets Authority – New Zealand (OK)

Conclusion: Double check the authority of the governing body that regulates the broker you are looking at. You can go to the website of the governing body to search for the registration number and verify its legitimacy. To help investors find a trusted broker where they live, we have created country-specific forex broker guides.

3) Is the broker offering profits or rewards for opening an account?

Scam brokers often make claims such as “make $50 a day from a $250 investment” or “make 80% returns on profit signals” or “96% success rate.” These claims are a scam, regardless of whether they are being made for forex, CFDs, or binary options. Forex brokers should not promise returns at all, small or large. Simply put, if a broker is promising to make you money, it is a scam. Other common scam practices include advertising pictures of expensive cars that are given away to lucky investors.

This Wikipedia page on binary options does a great job of summarizing risks related to binary options:

“Many binary option “brokers” have been exposed as fraudulent operations. In those cases, there is no real brokerage; the customer is betting against the broker, who is acting as a bucket shop. Manipulation of price data to cause customers to lose is common. Withdrawals are regularly stalled or refused by such operations; if a client has good reason to expect payment, the operator will simply stop taking their phone calls. Though binary options sometimes trade on a regulated exchange, they are generally unregulated, trading on the Internet, and prone to fraud.”

Conclusion: If a binary options or forex broker promises you big returns on your money, this is a clear sign of a scam. You will not make $100,000 on a mega-trade; you will not make a 96% profit in 30 seconds; and you will not win a $40,000 car by depositing $2,000. Save your money and STAY AWAY.

4) Is the broker offering a cash bonus for opening an account?

When a broker offers an abnormally high cash bonus, is not regulated, and does not show offer details for the bonus, then you are likely dealing with a scam broker. For example, 1000Extra hints at a bonus of $1,000 with their vague promotional offer. If you click around trying to gather more information you are redirected to sign up for an account.

1000Extra is not regulated, has minimal information about the company, and has scam reports across the web.

Conclusion: In most regulated regions around the world, promotional bonuses for opening a new account are not allowed. The two exceptions are the United States, which is for US citizens only, and Asia.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Broker!
    Perfect for beginners!
    Free Demo Account! Free Trading Education!

  • Binomo
    Binomo

    Only for experienced traders!

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How To Choose Binary Options Broker
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