We’ve heard many stories about binary options, from news reporters, financial bloggers, regulators, scam victims, technology providers and brand owners. This time I’m happy to bring you readers something new, a different angle on binary options.
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Here’s someone whose opinion you forgot to ask for, a regular trader, just someone who wants to trade without fear. “Trader Joe” has a live account with one of the biggest binary brands and he’s an active member of our community. This is a letter from a real trader.
Traders want better binary options regulation
We, the traders, want better regulation! Yes, there are actual traders, smart investors, who want to trade binary options and didn’t get sucked into the trading world because of a fishy advertisement they saw somewhere, traders who don’t expect to get rich overnight and who would simply laugh at the idea that an auto-trader could make them money without any effort.
Parallel to this world of scam brokers, scam signal services, trading gurus, fake regulators and regulators who just don’t care or focus on the wrong things, there is a community of real traders who recognize an opportunity to have a good time and to possibly make some money.
Some of us enjoy binary trading and simply want a safe, regulated environment to trade in which we can trust the brokers, the brokers aren’t afraid of the regulators, the general public is safe and the traders are happy.
Bad regulation is hurting the binary options community
Bad regulation is hurting the binary options community and it’s been doing so as far as we, the community of traders, can remember. Ever since binary options became popular, con-men and fraudsters skillfully adapted their methods to include them, taking advantage of potential traders with little or no hindrance from regulators or anyone else. From scam autotraders to scam brokers and fake anti-scam websites, we, the legitimate trading community, have seen it all, thanks to the dilatory reaction from authorities.
At first there was no regulation, and that was really bad. Nearly every broker on the market, legit or not, was using pushy tactics at the least and outright scams and thievery at worst. Eventually CySEC came along, and they have been doing a lot to help control the tide of scammers and con men, but even they have a hard time controlling the flood of ‘off-shore’ brokers registered in tropical island banking havens and operating across borders and jurisdictions with impunity.
At least now there is a movement among regulators in Europe to better control the scams and con artists but the problem now is that many (will probably) take regulation too far.
The real problem is twofold. A lack of global regulatory organization and also because binary options was for a long time considered a ‘victim-free’ industry. How can it be victim-free when people get scammed?
Because not everyone who gets scammed runs to their local police station to make a complaint, and those that do, find out that there is nothing the local authority can do about a rogue website offering binary options get-rich-quick schemes. What it will really take is an international effort and cooperation among the many different regulators, and forms of binary options trading. With that said, I suppose it’s time for all of us traders, as a community, to demand better regulations worldwide!
It’s fun but infested with scams!
Binary options are fun! No doubt there, whether you just want to play around and try your luck in the market or if you are a serious trader, there are fun times to be had trading binary options. You can just trade on your hunch or what your friends think, or spend some time learning technical and fundamental analysis like a professional investor. For the latter group, it is possible to grow your account and earn money but it takes time and dedication, for the former, you might earn some money but you will for sure have a good time and you will definitely learn things about the world, the market and yourself!
Unfortunately, far from everyone is a serious investor and the demand for making quick and effortless cash invites scammers to create and promote too-good-to-be-true offers that are always scams.
How does bad regulation open the door for crooked brokers?
First and foremost, I have to admit that the regulators worldwide have been tougher when it comes to binary options and firms claiming to offer services for traders. Their effectiveness however can be criticized. In some countries, binary options are outright banned which means that even offshore regulated brokers that operate without any involvement with any scam get blocked, and the ones that are scams are often able to operate there anyway.
This isn’t necessarily the best approach because the bucket-shop firms that don’t care about running a serious business will continue their solicitation of clients, disregarding bans and laws. Another form of regulation that many authorities are implementing is demanding a license for any firm that offers financial services but again, the focus is more on making it hard for firms that are willing to operate legally than creating an environment where honest, open and fair binary options trading can take place.
I mean, we have legal casinos to keep gambling off the streets and out of the back rooms, we should have the same for binary options.
The binary options industry needs better regulation
The binary options industry needs better regulation, regulators need to cooperate and the industry and the regulators need to work together. By doing this, forming solid relationships within the community of traders, regulators and brokers, we can create a safe, regulated trading environment in which the traders are happy, legit brokers can stay in business and the general public is free from scams.
After all, eradicating binary options won’t eradicate fraud or scams, the bad guys will just figure out another way to do it, and it will probably be much worse than what they do to people in the name of binary options. It’s time to take control of our industry and stop letting a few bad apples spoil the bunch.