Online trading involves risk, however, the biggest risk might not be trading itself but poor online security hygiene. It’s good to make sure you are aware of the latest cybersecurity threats and tips on how to avoid them.
In this article, we will discuss basic tips that help you protect your funds.
What are the Risks?
There is always a risk when buying and selling online. The biggest danger comes from fraud or scams as they are easy targets for beginners. You might be tempted to invest in something you don’t understand or to share your bank account details on the internet. In general, you need to be careful about not revealing any personal information while using the internet. In addition, some online trading sites are not legitimate and may simply be looking to steal your funds. It is important to do your homework before making any large-scale investments.
In addition to the risks of having your accounts hacked when accessing online trading via Wi-Fi or public internet, there can also be issues with fraudsters impersonating legitimate online traders, who give suggestions in return for money.
Another risk comes from identity theft and fraudsters looking to take over your accounts by impersonating you through email or social media or even trading platform employees.
How to Stay Safe When Trading Online?
It’s hard to buy something you don’t understand or don’t know much about. Online trading can be a good way for you to earn extra resources, but you should educate yourself before you start trading. If something sounds too good to be true, it probably is.
Here are 13 basic tips to keep it safe:
- Only trade with reputable brokers. Always check the companies registration and licensing information to see where they are operating from. If they don’t have these details, then it is likely they could be running a scam or even worse, a Ponzi scheme.
- Look for a website that has an SSL certificate, which means it’s using encryption technology, meaning all the information sent between your computer and theirs is secure.
- Use a secure VPN connection. Many brokerage firms may assure they have plenty of security measures in place, however, if your own network connection is being intercepted, their cybersecurity measures won’t likely help.
- Use strong passwords. Passwords should be 8 characters or more, contain a mixture of upper and lowercase letters, numbers, and special symbols. It is also good to avoid using the same password for different platforms because this might increase your risk of being hacked.
- Never click on any links sent by email; instead, go directly to the website where you want to log in. Many times, scammers will send out fake emails to steal people’s personal information or even login credentials.
- Don’t trust any links sent via email by companies asking you for your personal details or login details. If the company has a genuine reason to change your password, they should have your permission before doing so.
- All software downloads should be scanned before installation, and when purchasing any application from an unknown market or website, you should always read user reviews to see what other people think about it first.
- Make sure the company provides a secure and stable platform for online trading. If their platform is not reliable, you could be putting your money at risk.
- If you are unsure about a website or company, consider asking for some advice from an independent financial advisor.
- It is also good to familiarize yourself with all the laws that govern online trading, the national financial regulators, and the company you are investing with.
- Finally, keep in mind that there is no 100% guarantee that criminals won’t find a way to get into your accounts, so always have an exit strategy before depositing any money.
- Make sure the company is regulated and licensed. Your deposit might be at risk if the company doesn’t have regulatory approval. For example, you can validate a secure share trading online platform by checking its FCA register number and see if the company is listed on the official government website.
- Don’t let yourself be fooled by make money quick types of scams or similar frauds via online ads. It’s simple to motivate people to do something they normally wouldn’t if the person is in a bad financial situation
What is Online Trading?
Online trading is a way of buying and selling stocks, funds, currencies, derivatives, and other assets via the internet. It is often done on a real-time basis and is therefore also commonly referred to as online trading.
Why is Online Trading so Popular?
The ease of access to a typically simple-to-use website that allows you to view all your accounts at once without having to log into separate websites is one reason for its popularity.
In addition, there are no complicated charts or expensive desktop software required, which means online trading is especially popular with beginner investors.
With over 1.5 million active online trader accounts registered in Australia alone at the beginning of 2018, according to ASIC, this number was nearly half of that during 2017.
- It is estimated that about one-third of American adults have investments outside of their retirement accounts.
- Over 50% of all brokerage clients make between 0-3 trades on yearly basis.
- Over 14% of U.S traders in 2018 are between ages 30-49.
How Can I Trade Online?
To trade online, you need to register with one of the many brokers on the market. Brokers are basically companies that make money by offering financial services to retail investors for access to the stock market. There are different types of trading platforms such as cryptocurrency trading, forex trading, and share trading. You can choose any reputable broker that has regulatory approval.
How Does Online Trading Works?
Most trading sites offer a simple way to buy or sell a particular stock, share, or other assets.
If you are buying, what happens is you specify how much of the asset you want to purchase and then indicate whether your order will be a “market order” (the most commonly used type) which specifies that the order should be filled at the best price available, or a “limit order” (an order to buy a stock only at or below a specific price) which specifies how much you are willing to pay for the asset.
Once your purchase is completed and confirmed by the trading site’s transaction record system, you will be notified of the trade confirmation via email.
Online trading is a fast and effective way to earn extra. However, it is not without its dangers. If you want to be safe when trading online, follow the tips above and never let yourself be fooled by any quick-buck schemes.