We always try to keep our visitors apprised of the latest binary options scams which are circulating the internet, and there are a lot of them. Scams can take on many forms. Some take on the forms of scammy brokers, others instead take the form of trading signals or trading systems which do not deliver on their generally ludicrous promises of extraordinary, unsurpassable success. You can get so caught up trying to avoid being scammed by other people though that you may not be paying attention to the most likely culprit—yourself.
“But why would I scam myself?” You may think it is an absurd suggestion, but there is actually nobody else who is more likely to rob you blind through poor decision making. In fact, a lot of the blame that gets placed on brokers, trading systems and signal services actually belongs with the traders casting the blame in the first place. Here are a few favorite excuses of traders who are losing money:
“It wasn’t my fault at all. My broker messed up my trade. He didn’t deliver fair market prices. He stopped the clock at the wrong time.”
“The trading system I bought was guaranteed to give me 100% profitability. I got taken in. It isn’t my fault that I am losing money trading this system. I was supposed to be winning all of my trades.”
Neither of those excuses is necessarily nonfactual—but neither do they present the entire story in all situations. In the first case, sadly in the binary options world, there is a pretty good chance that the excuse holds water. These are typical moves that scammy brokers make against their customers. But if a trader with a trustworthy, law-abiding broker makes this claim, it is likely that he is scamming himself by not being honest about his own trading mistakes.
The second excuse above holds almost no water, because it is the trader’s fault that he purchased a system from a vendor that made impossible promises. It is also his fault that he did not test that system before he decided to trade with real money. Are there worthless systems out there? Certainly, but there are also a lot of systems that are valid and work, but fail because the trader implementing them has no idea what he or she is doing, and invests before figuring it out. Systems do not work on their own automatically; they require your correct understanding and implementation to function.
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Here are 5 common ways that traders scam themselves:
The example above where the trader purchased the system guaranteeing him 100% profit is a great example of this. The scam artist who sold him the system had his work cut out for him, since this trader already believed the impossible was possible. Never lose sight of the fact that there is risk involved with binary options trading. If you see an offer which looks too good to be true, it probably is. Another way in which these kinds of expectations can endanger a trader is in pushing them toward foolish decisions. If you feel impatient, you are bound to make bad calls. Patience and realistic expectations go hand in hand. It takes a while to make it in trading. For the majority, this is a path which takes months or years to walk.
Thinking you can beat the market
The market is in many ways a rather nebulous thing, comprised as it is by the actions of traders around the globe, constantly changing, and responding to countless factors. Yet there is a tendency for traders to personify the market and set themselves up against it as if it were an adversary. This is already a bad idea, because the market is not your enemy, and if you treat it like one, you are taking a very negative approach. But if you do personify the market, you are making yet another fatal mistake if you believe that you can outwit or outsmart it. Setting yourself up in a contest of wills with something which is indifferent to the outcome can never result in any sort of triumph.
Relying too much on others
A lot of traders will do whatever they can to avoid work, because they believe that binary options offers them some kind of an alternative to work. Trading is simple, but it still requires a lot of energy, focus, and dedication. It can eventually become your sole stream of revenue, but only if you actually manage to become a profitable trader. When you rely too much on others, that is impossible over the long run.
What are some examples of ways you can become too dependent on others? Auto-trading is a big mistake. Almost nobody does well with auto-trading, since it makes you less involved in your own trading, and you will not understand what is going wrong when you lose. Another example is investing in somebody else’s trading system without testing, understanding, and applying it yourself. The same goes for signal services. There are some good ones, but you should be cautious when you use them, and make sure that they make sense to you. You are not going to make it in binary options based solely off of someone else’s work.
Not doing your research
Do your homework before you accept a bonus, sign up with a broker, fund an account, or buy any other product related to trading. You are doing yourself no favors if you rob yourself of critical information which you need to make a decision. Read reviews by third parties for brokers and other services. Think carefully about what you are reading and try to judge whether the reviews appear to be fair and objective, or whether they were written by an affiliate. When you see really generalized reviews or reviews that are overwhelmingly, glowingly positive, you usually are dealing with affiliates. Just use your common sense and you will be fine.
Lying to yourself
There are a lot of different reasons why binary options traders may lie to themselves, and self-deceit is far more common than self-accountability. You might not feel you are able to face your losses or your mistakes, or admit that you were wrong. It can be painful to deal with the feelings of shame and doubt which come along with admitting mistakes. But lying to yourself during any part of the trading process is a terrible error, one which will cost you more than probably any other. Honesty is one of the most vital traits for any successful trader. Without it, you have no way to improve and become more profitable, or stop yourself from losing money.
Binary options scams are out there, and they are very real, but the vast majority of traders who lose money will lose not because of others, but because of themselves. When you avoid the mistakes above, you are less likely to fall prey to other scams, and you will not engage in negative behaviors that can cost you money. When you do make a mistake, you will see it in time to make a correction and move forward. By taking this approach of holding yourself responsible for your mistakes, you can become a more profitable trader. You can also use these rules to ensure consistency. What should you do if you do end up victim to a scam, despite your best efforts to avoid them? Make sure you report the company to regulatory agencies and post reviews in online directories to warn other traders to stay away.