Five top tips for staying safe when trading with binary options:
1. If it Looks Too Good… avoiding Binary Options Scams
The old adage that ‘if it looks too good to be true then it probably is’ certainly applies to binary options. As with any financial trading product don’t be lured in by false promises of instant riches or untold wealth.
You will find a huge array of signals services, trading robots and gurus in the binary options space who are all keen to part you from your money. Always ask yourself why they are so keen to market their products; if they are so good why don’t they use them themselves!
If a trading signal service or means of making money looks too good to be true assume it is. Far from making you money you may put yourself at risk of actually losing it. You could end up losing more than you bargained for
2. Understand the Binary Options Bonus
Traders are often drawn to a broker on the basis of the bonus offered. Sometimes it is the lure of risk free trades or free promotional materials. What many fail to realize is that these ‘free sign up incentives’ come with conditions attached. Not understanding these at the start will inevitably lead to problems later down the line.
The deposit bonus is not a scam as many new traders believe. However you need to understand the implications of acccepting it. It llows you to leverage your account balance, giving you the potential to earn greater profits. Accepting a bonus can be a shrewd move if you know how to maximize your profits from using it, however it may restrict your ability to access you money if you need it quickly. If in doubt politely decline your bonus when setting up your account.
3. Read Before You Sign Up
Most complaints about brokers come about as a result of traders not being fully aware of what they are signing up for at the outset. Deposit bonuses, mentioned above, are just one example where traders are generally not aware of the conditions they have agreed to at sign up.
Don’t be caught out on-the-spot. Always go away and read any terms and conditions attached with bonuses from your broker, prior to accepting them. If you don’t you will only have yourself to blame. If you find that you can’t access your funds at a later date or your withdrawal is taking longer than expected then whose fault is it going to be? Yours!
Even the best binary options brokers are subject to the occasional complaint, but often this is simply down to the trader not taking the time to understand the terms of business or familiarizing themselves with the processes in place.
4. Make use Of Demo Accounts
A demo account from your broker is your friend. These accounts tend to be very underused by traders. Most are too keen to jump straight into live trading without taking the time to first test out their strategies. For those traders sensible enough to demo trade first, they provide a great way of testing and refining your strategy ‘risk free’.
Demo accounts while free, will generally require you to open a live account and make a deposit. Only then will you be able to ask your broker to set you up a demo account. Once this is done you can test out your strategies and get rid of any that don’t look likely to perform.
5. Learn to be your own trader
Too many traders make the mistake of taking up the binary options mantle and never learning things for themselves. Instead they rely on gurus, services and forums posts to guide their trading. Jumping from one strategy to the next they inevitably end up losing money and becoming frustrated.
If you want to make money it is important that you learn to stand on your own two feet from the start. Learn to trade yourself and take responsibility for your own trading performance. Don’t make the mistake of relying on or blaming others. The buck stops with you if your performance dips. Remember that the best binary option traders trade for themselves.