Why Binary Options Signals are a scam

The right timing when buying an option is crucial for successful Binary Options trading. The use of trading signals should help to increase returns significantly. We have tested several providers of such systems. But often they are not profitable in the long run. On this page, I will explain to you why Binary Options Signals are mostly a scam and how to find good signals by yourself.

In this test, IQ Option in particular proved to be a useful signal generator if you want to find signals by yourself.

However, there are also a number of other providers who provide Binary Options signals that can be trusted in principle. We have listed these in the following list.

Broker:

Rating:

Advantages: 

Start trading: 

IQ Option logo
5/5

+ Yield up to 100%
+ Best platform
+ 24/7 support

Deriv logo
4.5/5

+ Yield up to 95%
+ Auto trading (bot)
+ MetaTrader 5

Pocket Option logo
4/5

+ Yield up to 92%
+ Bonus program
+ Accept any clients

What can signal providers actually do?

As is well known, trading in Binary Options is based on an extremely simple principle. All a trader needs to do is correctly predict whether a certain underlying asset will rise or fall within a fixed time frame. In order not to trade like a pure game of chance, it is important to base your decisions on as solid a foundation as possible.

Binary Options provide important impulses for this by showing traders specific points in time in the market development, from which developments of prices can be predicted with a particularly high degree of accuracy. However, due to the high complexity of the markets, users should never expect a 100% accurate prediction.

Binary Options principle

Nevertheless, this does not mean that providers of Binary Options signals make their recommendations randomly. In principle, a signal generator is considered to be helpful if the hit probability is well over 50 percent. On such a basis, continuous profits are possible in the long term. As a trader, however, you should be careful with the announcements made by the signal providers themselves in this regard.

A hit probability in the range of 75 percent to 80 percent probably only applies to a few models. It should be noted that such providers may only publish very few signals. The background to this is precisely the claim to achieve the highest possible hit rate. Specifically, for signals with an above-average hit rate, only three to a maximum of 15 signals per trading day can be expected. Since this has a strong influence on the usability of the signals of a particular provider, attention should, therefore, be paid primarily to the number, but also to the underlying instruments to which the signals refer when a particular provider is selected.

Binary Options signal providers can do:

  • Giving exact buy and sell signals
  • Giving signals depending on indicators
  • Giving signals depending on chart analysis
  • Giving signals depending on economic news
  • Giving signals depending on a strategy

Warning of Binary Options Signals

You might ask why I say that 99% of Binary Options Signals are a scam. The truth is there are a lot of scammers on the internet like youtube or Facebook. They want to steal your money by providing fake signals or selling a bad service. You should be aware of such tactics. In the next points, I will explain how to avoid fake signals:

Scammers are using trading signals

Scammers are faking trading signals and profits on their trading accounts. This is a simple tactic to convince beginners to pay for their signal services. Simply they do not care if their signals are profitable or not. They just sell you the product to earn money. You will probably lose all of your deposited money on your broker account.

Brokers offer bad trading signals

On some broker platform, you will find trading signals. I tested them with different providers but the problem here is that they are often inaccurate. You will see that the entry points are not accurate enough to make a profit. Often the signals are confusing for traders because there is no detailed description or tutorial on how to use the signals.

Providers are earning money buy broker signups

Some Binary Options Signals providers want you to sign up with their own brokers or a partner broker. The broker will pay out commissions to the signal provider. Again the outcome of the trading signals has no matter for the provider. He is not interested to give you profitable signals. He just wants the broker’s commission. There is a huge conflict of interest.

No professional trader is selling trading signals – here is why

As an experienced trader, I know that no professional trader who is really successful in the markets provides trading signals. It is nonsense to believe that a successful trader shows you his signals.

Just imagine: You are a good trader who makes a lot of money. Do you have time or do you want to publish signals? I think not. It is just a waste of time for them.

Conclusion: Do not trust signal providers

I will repeat me – but do not trust any signal provider. For being successful with Binary Options you need to learn it the hard way by yourself or you will lose a lot of money. Create a trading strategy by yourself and find the right signals in the chart.


Usability of the signals for short option terms

Traders who want to use Binary Options signals should also pay close attention to which trading instruments the signals are to be used for. In particular, Binary Options with very short terms, i.e. with expiration periods of one minute or less, can sometimes encounter problems when using signals.

Above all, traders should be able to ensure that the trade based on the signal can be executed as quickly as possible. In the best case, real-time execution should be possible. However, if there are long delays, there is a risk that the Binary Options signal will already be out of date when the operation is executed.

Can binary options signal providers be trusted?

Investors who are considering using the services of signal providers are naturally primarily concerned with the extent to which a particular provider can be trusted. Given the abundance of different providers of Binary Options signals, it must be assumed that by no means all of them are reputable. So first of all, attention should be paid to the basis on which the signals are based.

In addition, the appearance of a signal provider should indicate whether reliable successes have been achieved in trading in the past. Investors should always bear in mind that even automatic signal transmitters are far from being infallible. Statements that suggest to traders that several trades in a row are guaranteed to be successful should, therefore, be treated with caution.

Since in the area of stock exchange trading, the success of certain operations can never be guaranteed in principle, such statements must be considered absolutely dubious. The same applies to providers who advertise with success rates of 75 percent and more. In many cases, such statements cannot be proven.

Important: Adjust individual investment strategy

From the trader’s point of view, it is first and foremost important that signals are viewed as soberly and rationally as possible. On this basis, we have also looked at the various providers and paid particular attention to how their success has developed over the long term. Success series achieved on individual trading days have only very limited significance.

The same naturally applies to a series of failures. The decisive factor is whether the announced success rates can be maintained over a period of one month or more. Against this background, it is, however, also of crucial importance for traders that their individual investment strategy is adapted to this trading principle.

The basic prerequisite is, first of all, to enter the market only with capital that is not directly necessary for coping with everyday life. Long-term money and risk management are also crucial. As with investments in general, capital should be spread as widely as possible with binary options signals.

In concrete terms, this means that the trading capital should be spread over as many signals and values as possible with small individual amounts. Success is then achieved in the long term via the average success rate. However, the stakes should always be selected in such a way that even temporary lean periods can be overcome, i.e. certain losses should be taken into account. It is just as important to set a concrete loss limit, which, if reached, will lead to a consistent exit from trading.

Find your own Binary Options Signals

When it comes to trading with Binary Options every trader should have his own strategy and style of trading. It is hard to copy other traders and their strategies exactly because you do not have the same experience on the market.

Learn more about the following trading strategies:

I recommend finding your own Binary Options Signals with a chart analysis combined with indicators. For finding a good entry point you can search for support and resistance areas in the market and trade them. These are prices where the price is cheap or expensive. Many traders open the positions there and turn the market around. Combined with indicators it can be a powerful trading strategy.

See the picture below:

In the picture above you thee an important price level where the market reacts a few times. First, it is a support area which pushes the price up. Then the support area becomes a resistance area. In combination with the RSI indicator, it is the perfect setup to open a trade.

Flexibility in choosing the Binary Options Broker is also important

Those who have already looked around a bit in the segment of providers for trading Binary Options will have noticed that there is now an impressive variety here. The same applies to signal providers, where you can now also choose between different players. In principle, it should be possible for the signals to function independently of the respective provider or the selected online broker and to be freely combined with each other.

Of course, it is important that signals and trading offers a match. As a rule, however, the signals refer to the most important values in the area of commodities and currency pairs. These are also offered by most online brokers for binary options. By contrast, signal providers who refer to certain online brokers are suspected to be merely offered to induce users to register with a certain online broker.

Check our Binary Options Broker list here.

Broker:

Rating:

Advantages: 

Start trading: 

IQ Option logo
5/5

+ Yield up to 100%
+ Best platform
+ 24/7 support

Deriv logo
4.5/5

+ Yield up to 95%
+ Auto trading (bot)
+ MetaTrader 5

Pocket Option logo
4/5

+ Yield up to 92%
+ Bonus program
+ Accept any clients

Brokers with signals only for their own customers

Even though it is in principle possible to freely combine signaling devices and online brokers, there are some special features to consider. Especially with independent signaling devices, we believe it is necessary to pay closer attention to their motives.

On the other hand, if the signals are supplied by those online brokers whose services are also used in trading, traders can assume that the offer is trustworthy. Corresponding signals are published in the interest of the clients. This conclusion is based primarily on the fact that the reputation of the online broker and the success rate of the signals are directly related. If the signals prove unreliable in the long term, online brokers must expect to alienate their customers as well.

Conclusion: Many questionable offers – no fraud with providers tested by us

Trading in Binary Options offers enormous opportunities but also risks. Binary Options signals can be used to optimize trading for the long term. The prerequisite, however, is that a trustworthy provider is chosen. Given the large selection, this is not always easy.

First of all, a comprehensive analysis is required to determine whether the predictions regarding the signal provider’s profit rate are correct. It is equally important to ensure that a binary options provider does not pursue dubious interests. Traders are therefore on the safe side if they use a signal provider that belongs directly to the online broker they are using.

(Risk warning: Your capital is at risk)


Check out my other posts about Binary Options:

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