Whose Signal is That, Really? The Transition from Scam Brokers to Scam Signals
There is no doubt that binary options are rife with scams. The good news is that the industry is progressing and maturing to a point where there are safe havens for enjoyable, entertaining and even profitable binary options trading. This is due in large part to two things; regulation and businessmen. Regulation has helped in some ways to set a standard of operation, in some areas at least, and businessmen have recognized the long term benefit of operating a legitimate brokerage rather than a fly-by-night gone-with-the-wind scam broker bucket shop. This does not, however, mean that scams are gone, that scammers have ceased to exist or that binary options trading is safe because it’s not. There are still scammers and they are still scamming, they have just changed their focus.
Originally, in the old days, a few years ago, back when digital trading first began gaining popularity, the scam thing to do was to open up a shady broker. It was easy to either create your own platform to simulate trading, or use a white label service (I’m not pointing fingers, there are some white labels that have been abused by the scammers) to create one with the click of the button. These brokers were only in business to collect your deposits. They did not offer good service, did not have great trading, were often plagued by bugs and seldom remitted withdrawals. The claim was often that problems were the fault of your ISP or computer, or that you failed to meet bonus terms, or that you were committing fraud or any number of things making it your problem and not theirs. Needless to say this is a big part of why binary options got such a bad rap.
Now, through the efforts of websites like BOTS, BONET, BOD and others, along with organizations like CySEC and the FSA the playing field is just to difficult for shady brokers to operate in. This doesn’t mean that there aren’t still some out there, it’s just less common to find one than it used to be. So what happened? The hucksters have shifted their attention from the brokerages to providing signals services. They have changed tactics, instead of going directly for you cash through a broker, they are now indirectly attacking the unwary through SSP’s (Signal Service Providers, see this article – YouTube Beware, Signal Sellers are Coming!). The SSP’s are free, easy to use, guarantee a moderate rate of success and only require that you open a new account with their “trusted” broker in order to receive the service.
How Signals Sellers Give Brokers a Bad Name
Many time in the past this trusted broker would be in fact a shady broker who either was in cahoots with the SSP or owned it outright. The problem now is that there are less and less shady brokers, and when a new one pops up traders are more and more wary of it so this tactic is not as successful as it once was. This means that the SSP’s, instead of giving up, have started to use legitimate and trustworthy brokers as the “featured, trusted or recommended” broker. Does this mean that the SSP and the broker are linked together? No, it doesn’t and this is because of online marketing. It is very easy for anyone who wants to to join right up with an online partnership program and then start promoting the broker or brokers represented by that program.
The ease of online marketing is almost scary. You really can sign up and start placing banners and links within minutes. The really scary part is that because anyone can do it, and it is the internet, what you find in terms of marketing materials may or may not be the truth, like the results or ease of use of a an SSP. I think now it will be easy to see how an SSP can make a broker look bad. Not because the broker is bad, or because binary trading is bad, but because the promises and claims of the SSP were not honest, the service was not aimed at the long term success of its users and the people backing it are scammers. We’ve already discussed free binary options signals, now this article comes to prove the point.
The Take Away
The take away from this is that there are still scams out there. Some of them are brokers, but more and more of them are SSP’s. Many of these SSP’s are recommending good brokers, and giving them a bad name. What this means for you as a trader is to be wary of SSP’s that require you to deposit and to do your own checking when looking at a broker. Just because somebody else got scammed by an SSP using 24Option or AnyOption or EmpireOption or StockPair or any number of good brokers that the broker in question is a scam. It’s easy enough to lose your money on your own, don’t let a sucky SSP lose it for you.
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