There is way too many scam binary options products being released back in 2013 and there is no sign of stopping. While some people claim that binary options trading is gambling, others claim that it is actually not gambling since you can tell the position of the certain asset, let say EURUSD, whether it is going up or down, based on indicators and news time.
By the time we posted this article, Spectrum 7 binary options app is just launched. Just like tons of other BO related software, Spectrum 7 used an actor to represent their company and sell you another over hyped product.
Based on the sales video, the creator, Derek Folsom (which is not a real name by the way) claims that anyone can make at least $1500 per day with this system.
A brief overview of binary options trading
In case you didn’t know, binary options are actually about making money when the market goes up or down. In forex trading or the stock market, for example, you can trade by just using things like support and resistance, candlestick chart and more. In forex or the stock market, your profit is given by the brokers based on the price when you placed the order vs the price when you choose to sell that asset.
Binary options, on the other hand, is about making the decision when to call or when to put based on your predictions. For instance, if you think that the asset is going up, then choose call. Otherwise, if you think that it is going down, then choose put. You don’t need to place orders at certain 1.0665 points or something. Just follow your indicators or whatever trading software that you used.
A little bit about automated trading
Can you automate the trading process? In short, yes you can since price movements are actually based on charting software called indicators. But still, you will realize that learning and trade manually are much better with higher profit compared to automated trading by using robots or software.
Trading with robots will require some kind of budget since this software are created by human programmers and you need to pay them. However, yes, it will consume much less time compared to learn how to trade from scratch.
Why Spectrum 7 claim (that is make $1500 per day) is not realistic to some people
Most binary brokers will only pay 85% profit based on the amount that you trade. For example, if you choose to risk $10 per trade, then you will gain $18 for each winning trade. Otherwise, if you lose the trade, then you will lose all $10. Which means, your overall ROI is quite low, compared to your overall risk, that is 85%.
Did you think that the testimonials and Derek Folsom are actually a real person?
If you have been sold to another next big binary options product before, then you will probably realize that tons of videos like in spectrum7.co website is actually made by hiring actors. The same goes for the testimonials on the website. All of them are actually not the real person, they are just actors. Based on our research, some of them can be paid for just $5 at certain freelancing websites.
Register, deposit and boot up the software…But what broker?
In case you still want to deposit money and make this app works, then you need to register and then deposit money into their recommended binary broker. The problem is, what kind of broker? They didn’t mention the name and what regulations for their suggested broker.
In case you didn’t know, not all brokers are equal. Some binary options and forex brokers are regulated. However, some of them are not. Regulated brokers obey the law, they are quite transparent when comes to withdrawal or deposit. Regulated brokers will obtain their license from government agencies, such as CySec or ASIC.
However, unregulated brokers, on the other hand, is different. They don’t even mention any license numbers on their website. While they can process payment for your credit card, since your payment is processed by the secure server, there is no guarantee that you can claim your money back.
Is Spectrum 7 recommended? Nope….
We don’t recommend this app for several reasons:
#1: Problem with binary options itself. Like being mentioned, if you win one trade with binary options, then you will gain at most 90% of the money that you risk. Otherwise, if you lose one trade, you will lose all the money. For every dollar that you invest, you need to win at least 2 times to break even. This is quite different compared to forex where you can set stop loss. Real traders will always set the stop loss level lower compared to take profit levels.
#2: There is no way you can test this app on a demo account. The fact that you are searching for this product on Google, means that you are new to trading. Therefore, you might don’t know that good brokers, usually forex brokers will have demo accounts provided to all clients. You can test the water first with fake money for several months until you can get the right direction.
#3: There is no proof that this really works and there is no demo video where you can see how this software works. Good software will usually provide some kind of demonstration video on how you can use them, rather than using dubious testimonials and voice actor.
If you are serious about making money with online trading, check out our list of recommended trading apps.