Are Binary Options bot legit or scam?
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 r uns the business and where its offices are located – both on its website and in other marketing materials.
Price Manipulation.
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.
