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Identify Fraud

You may have come across many attractive investment opportunities online, but it’s important to always be skeptical prior to investing personal funds. While many new binary options brokers have been entering the scene, they are not all regulated. One of the most important markers of broker quality is their regulation status. Always do your research before entering any agreements and get the facts. Because binary options trading is directly impacted by highly volatile market conditions, it’s important to only invest money that you can afford to lose. If you’re a German binary options trader, read on for some of our top tips to avoid a scam.

  1. Fully vet the regulation status of any broker you’re looking to do business with. In Europe, the Cyprus Securities and Exchange Commission (CySEC) is one of the most well known certifying bodies. In the United States, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are the two primary regulatory bodies of securities trading.

  2. If it sounds too good to be true it probably is. Guaranteed returns and exorbitant promises of profitability are both red flags. All trading opportunities are high risk propositions, so you should always proceed with caution.

  3. Check to see if the broker is on any governmental blacklists. The SEC’s Public Alert: Unregistered Soliciting Agencies (PAUSE) program, for instance, aims to list all brokers operating without proper licensure and compliance with federal securities laws. It’s also worthwhile to look into warnings issued by the SEC’s Office of Investor Education and Advocacy and the Commodity Futures Trading Commission Office of Consumer Outreach (CFTC) regarding such schemes.

  4. Avoid brokers that refuse to credit customer accounts and block withdrawals. These brokers will usually encourage traders to continuously make deposits without ever having the desire to let them withdraw funds. They may even repeatedly cancel withdrawal requests and ignore any enquiries into the transaction request. To find out which brokers have a history of this, check online reviews and all applicable governmental warning lists. Read the broker’s terms and conditions in full and make a minimum deposit to trial the withdrawal process.

  5. Research brokers that have previously manipulated platform software to produce losing trades. Read third party reviews and make sure they are not written by platform affiliates or sponsors. While one technical glitch is highly likely, repeated platform failures are a sign that fraudulent activity is occuring behind the scenes.

  6. If a broker pressures you to deposit money right away to lock in time-sensitive or once in a lifetime deals, then take a step back. Such propositions are often scams masked as promotions and it’s important to read between the lines. Resist the immediacy to invest right away and take the necessary time to plan your trades.

Although you’d like to believe that most businesses have your best interest at heart, always take any business offer with a grain of salt. Scam artists are aplenty on the Internet and falling into a fraudulent and deceitful transaction can be avoided from the onset with due diligence.