While other investment products are losing their appeal due to ever lower interest rates, trading in financial products still continues. Many private investors are now ready to take on more risk for the opportunity of higher returns. Especially inexperienced clients are often attracted to binary options. These promise high profits in a short period of time. However, there are also many negative reports on binary options trading on the Internet, and even Consumer Center is giving clear warnings here.
But what exactly is so risky about this easy-to-learn trade form for beginners? Are binary options scams? Or do critics not understand how to eliminate the risk of binary options? We got to the bottom of the most important questions on this topic.
Are brokers cheating on binary options?
Many former users doubt that trading in binary options is legit because they have lost all their trading capital. Many of these cases are not binary options scams, but traders misjudged the risk and did not expect such rapid losses of binary options. However, some users were actually defrauded of bad money by dubious brokers and thus had no chance to trade profitably.
There are many possibilities for binary options fraud by brokers. Since the prices are provided by the providers themselves, it is conceivable, for example, that there has been a deliberate manipulation and thus the broker has caused a significantly higher loss to the client than would have been the case without price manipulation.
Another problem is the brokers, who do not pay only the profits of the clients. The customer requests payment and then nothing happens for a long time. Presumably, customer service will still call the trader and try to persuade him to cancel his payment and prefer to continue using the funds for trading, maybe one day the broker will simply disappear from view. Will go With many sellers overseas, this type of scam often makes it difficult for traders to get their money and their rights. Therefore, from the very beginning, one should be careful in choosing a broker to entrust their own money only to reputable providers. What you will recognize will be told later.
Why is binary options trading so risky?
It is not only the high risk of binary options fraud that makes trading so dangerous. Even with good and reputable brokers, binary options trading is not recommended for every investor due to the risk of huge losses. While much can be gained on each trade, the potential loss is even greater, usually affecting the total stake. With a good trading strategy and targeted technical analysis of price movements, trends can be identified and price developments can be predicted more accurately, however, these methods have narrow ranges for binary options and usually They can only bring a relatively small increase in the trades they win. Even the best traders lose many of their trades and therefore have to recoup sometimes with high losses. Even though professionals make profits on average through good decision making, it does not mean that they are safe from dangers. Even with them, variance can strike, so that virtually every trader in binary options is at risk of total loss.
As binary options are strictly financial bets, there can be an addictive nature. Winning trades have a particularly high level of pleasure and trading with fast spreads especially excites prone individuals. Therefore, attention should always be paid to possible signs of danger.