The Single Most Critical Factor to Binary Options Trading Success

factor to successMay I suggest that prior to reading this book you make yourself familiar with the look and feel of a real life Binary Options trading platform, this will help you to better understand the guidelines and concepts described here. You can simply register to an online broker, it is free and without any obligation on your part. Which broker? How about this one (Recommended Brokers), This is the broker that we trade at, we chose it based on an extensive research and find it to be one of the best out there. I suggest you first tour its features and flip through the training resources in its extensive education center and just then commence with reading this book.

Now, there is one critical issue regarding Binary Options that I want to address right at the beginning of this guide and that is broker scam. In my opinion, the single most critical factor to your Binary Options trading success is that you trade with a honest and reliable broker. why? because once you fall into the hands of a scamming broker, no matter how effective your strategies are, you are bound to lose all your money.

Now, the word must be said – Binary Options are a legitimate and a viable financial instrument and most binary options brokers are honest and reliable – however, there are a few bad apples out there that give others a bad name.

So how can you avoid falling prey to a scammer? here are some ideas to help you with this.

For starter you can choose a broker from a list of safe brokers. Such a list can be found at the BinaryTopGun.com Brokers Page, you can also find it by running a Google search for ‘BinaryTopGun binary options’. The brokers on this list were checked and confirmed to be honest and trusted.
(General Risk Warning: The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.)

What if you want to trade with a broker that is not on the safe list? Here is a simple strategy that will help you choose a good broker. Once you decided to trade with a new broker, start small and watch for any irregularities in the behavior of his trading platform (see below). Trade with small amounts of money, test the waters first, once everything feels OK and you are more confident with the broker, proceed with your planed amounts and strategy.

Now, How can you spot a scamming broker? I’m going to reveal to you now how a
binary options scam works – once you know how it works it will be easy for you to
identify it when it is being tried on you.

In a typical scam the broker manipulate the movements of the underlying asset, usually upon the expiry time, in a way that the outcome will be in favor of the broker. For example, If the binary option is supposed to expire at, say, 11h30 and at that time it is “in the money”, the option is manipulated to remain open until, say, 11h31, and that last minute may be just enough for your option to expire ‘out of the money’.

According to one of the traders that was a victim to a scam, the broker has a system where you place a trade and a clock begins to count down to the expiration, when the clock ticks to zero you should be awarded a win or suffer a loss – until here this is a standard binary options trade, but listen what happens next. After the clock ticks to zero, you see this, “Expiring….” for at least another 30 to 60 seconds. During that time, if your trade was close, the stock move just enough for you to lose your money.

The scammer uses a trading platform where the trader has no way of having an exact time for the trade to expire because the clock goes to zero, but the broker keeps it open until it moves to where they get the investor’s money.

Since this particular broker features the Reuters logo on its site, one of the complaining investors has been spoken with Reuters who has informed him that they are looking at opening a case against the scamming broker as he is a risk of being fraudulent and is using the Reuters name to big himself up.

Another complaining investor stated regarding this system of scam: “… I noticed that the web site used to track my trades was having issues with the trades actually expiring 30 to 60 seconds after the time had run out to zero. During this extra expiry time is when the strike amounts would move and I would not be awarded my winnings if they moved just enough for me to lose. Then the site started slowing and freezing so that I could not see my trades, track anything, or see information regarding possible trades.”

In addition to observing the expiry time behavior of the brokers’ trading platform you should also examine the behavior of the broker’s asset’s price movements during the contracts’ time frame. You want to make sure the broker’s chart follows the market accurately. You do this by comparing the broker’s chart movements to a real-time chart of the same asset.

Now you know what to look for and how to identify a broker that uses scam techniques.

On a final note – there is one misconception about how binary options brokers make money that needs to be cleared. Some traders voiced concerns that they are trading “against the house” thus the brokers have an incentive to alter the data towards favorable outcomes for the broker. Well, this is not the case, a honest broker will derive his income from the difference between the total sum he pays to winning trades and the total sum that he gets from the losing trades.

Let’s look at an example – this is simplified to make the point. Say there are only 2 trades, same asset, same time, same expiry time. One trader chooses ‘Put’ the other chooses ‘Call’. Now the broker is indifferent as to what will be the outcome of the trade and which of the two traders win the trade, the broker’s profit will come from the difference between what he gets from the loser and what he pays the winner.

You see, binary options brokers have a viable business model that is not dependent on the outcome of the trades. That’s not to say that there are not a few dishonest brokers that are willing to defraud their customers for a dubious short term gain that will eventually cost them their business.

(General Risk Warning: The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.)

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Thomas Jan

Thomas has worked in securities company for 7 years and he was a finance columnist for 3 years,
Now, he is the founder and lead author of Binary Top Gun since 1'st January 2016.
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Thomas Jan

Thomas has worked in securities company for 7 years and he was a finance columnist for 3 years, Now, he is the founder and lead author of Binary Top Gun since 1'st January 2016.