Binary options can make you a lot of money. But you have to avoid being scammed. We show how to avoid binary trading scams. Recognizing trading scams can be difficult, but luckily, there is a great tool that can make the decision a lot easier for you.
What are binary trading scams?
Binary trading scams define brokers that offer an otherwise legitimate service but too worse payouts for you to make money with the broker. In contrast to binary options brokers scams, binary options trading scams will not directly steal your money or pull any other direct scam, they will scam you indirectly by putting you into a situation where you can only lose your money by trading.
Compared to broker scams, which are easily recognizable by checking a few easily observable criteria, trading scams are more difficult to recognize.
While brokers advertise their maximum payouts, these maximum payouts have little influence on your actual trading results – they are too rare to build a strategy on them. The value that has more influence on your success is the broker’s average payout. A broker with an average payout of 75 percent will enable you to make more money than a broker with an average payout of 70 percent – regardless of the maximum payouts these brokers offer.
The dilemma with the average payout is that is not that easy to define. Brokers adjust their payouts depending on the market conditions, which is why different trading strategies will create different average payouts, making it impossible to label brokers with an exact average payouts value.
There is, however, an easy way to determine which average payout you will get with your strategy from a broker. We recommend you use either one or both of these ways to determine whether a broker works for you before you start trading a broker with real money. This easy way is a demo account.
How a demo account can help you avoid binary trading scams
The only way to find a trading scam is by trading with a broker. A demo account allows you to do this test of a broker with play money instead of real money.
With a demo account, a broker supplies you with a certain amount of play money – somewhere between $1,000 and $50,000. With this play money, you can use all the tools that a regular trader would and that you will use later when you trade with real money, but you do not face any risk.
With this setting you can test any broker over an extended period of time, allowing you to determine for yourself whether you are dealing with a trustworthy broker or a binary trading scam.
Some traders do this testing with highly accurate methods, writing down each payout, calculating the average payout for different strategies, making a very sophisticated decision. Other traders take a more straightforward approach, simply trading their strategy for a while, monitoring their account balance, basing their decision on whether they have made or lost money by the end of their test.
Both approaches can work. We recommend you follow the strategy that suits your personality best. If you pay a lot of attention to detail and want to know every little factor, let your test reflect this aspect of your personality. If you like to wing it, there’s nothing wrong with letting your account balance make the decision.
To make finding a good binary options demo easy for you, we have created the site www.binaryoptionsdemo.org, where you can find the best binary options demos in one convenient list.