Online trading is growing in popularity. People feel the need to take control of their own investments, especially in this time of economic uncertainty. Technology has made it possible for investors to work with brokers virtually as opposed to visiting them in person or talking with them on the phone.
The same technology that makes online trading possible also opens traders up to potential cybersecurity risks. These include identity theft, hacking, and even the theft of money. How can you enjoy the freedom of trading online while keeping your computer, your family, and your investments safe?
Awareness Is the Key to Safety
In the real world, to be safe is to be aware. You would never walk down a dark alley in a dangerous neighborhood with a pocket full of cash and not be aware of your environment. Similarly, you need to be aware of the risks you might face when trading online.
Investopedia explains that the growth of mobile adoption in the financial arena also means that you can now trade your brokerage account from an online platform.
But some mobile and desktop trading apps are full of security holes – for example, they store passwords unencrypted locally. Some even send them to logs in plain text. A simple solution for that would be enabling two-factor authentication, but the problem is most apps don’t enable it by default.
A 2020 report by trading platforms by Privacy Australia showed that brokerages that allowed users to create bots also created unnecessary security issues. Bots like these programmed in based C++ and Pascal make it quite easy for malicious third parties to gain access to your app.
A follow-up study by IOA-Active showed the same issues, with nearly 40% of all trading apps demonstrating some key components of vulnerability.
Good security software can serve as a guard by providing you automatic alerts of a potential security risk. Once you get the alert, you need to know what actions to take. You should secure your online trading accounts and the data they contain by encrypting and securing potential entry points. It’s an outstanding idea to regularly back up your data. You can use a physical off-site backup or a remote cloud storage system. If intruders compromise your computer, cell phone, tablet, or laptop, you still have access to your trading data.
How Secure Is Your Password?
Your password is the lock on the door of your cyber investment information. A weak lock can be easily picked.
Never use things like your birthday, your anniversary, your phone number, your address, or other publicly available information as a password. Believe it or not, there are still people using the word “password” as their password.
We live in an age of password vaults and generators. These tools will not only help you create a secure password, but they will remember your password for you and remind you to periodically change your password. All the expensive firewalls and protection software will do you no good if you have a password that everyone can guess.
Let’s Talk about Two Factor Authentication
Two-factor authentication is becoming the norm. Your email account, social media account, and log in at work may offer this feature. Banks and trading apps are also allowing two-factor authentication.
When you log in to your online trading account, you will not only need the password to log in, but you will also need to have access to a secondary device, such as your cell phone or tablet. Two-factor authentication can also work with your email.
When you log in to your online trading account, a code will be sent to your phone, your tablet, or your email account. You will then need to enter this code along with your online trading account password to gain access. That way, even if you do have a weak password, hackers cannot reach your account.
Is Your Virtual Wallet Letting You Down?
If you have ever had cash stolen from your wallet, you know that it is all but impossible to track down who stole it or to get the cashback. Traders into the cryptocurrency market face a similar dilemma.
Blockchain is safe, secure, and encrypted. The weak point for many traders is the virtual wallet they use. There are a lot of companies offering virtual wallet services. You should only use one that has an excellent reputation. Sadly, some individuals will set up virtual wallets, encourage people to deposit their money, and then disappear, leaving their customers without money.
If you trade with cryptocurrency, make sure the exchange you are using is reputable. Cryptocurrency is becoming mainstream. Now, large firms have trading platforms that you can use to keep your coins safe, especially with growth predictions for the cryptocurrency market.
Make Sure That Your Internet Connection Is Safe
Don’t trade on computers you are not familiar with. Your own computer should have up-to-date anti-spy programs and antivirus programs installed. Only trade using a secure Wi-Fi connection. Avoid trading using public Wi-Fi systems, be them at coffee shops, railways, airports, or malls. If trading from a public Wi-Fi system is a must, make sure you have a reputable VPN installed.
When You Walk Away, Close Your Trading Session
A gargantuan mistake we see online traders make is walking away from their computer and leaving their trading session open. If you are logged in, anyone who can get access to your computer can access your account and do with your funds as they wish. We also recommend that you clear your cache at the end of the day.
Always Monitor Your Trading Account
Keep a close eye on all trade documents and regularly monitor your online account. You should have the habit of regularly logging in to your online account. If you receive an email or message from your broker, promptly review all transactions. Beware of transactions that are unauthorized or that seem suspicious.
Never give your login ID or password to anyone. If you cannot verify the source of a request about your online account, do not reply. Reputable banks and online trading companies do not contact customers and then ask them for personal information over the phone or by email. If in doubt, call your broker and talk to them directly.
It can be tempting to save money by going with newer online investing companies. However, there is a benefit in using large companies that have the resources to invest in cybersecurity. These companies can respond to issues once they have been identified, and they can minimize your vulnerability.
Pay close attention to feedback and reviews of the online trading companies you want to use. While you may not need to air-gap your machine or build a Faraday cage to trade securely online, you do need to take precautions. Remember, you are dealing with your hard-earned money. Don’t let unscrupulous individuals steal it from you. Instead, protect yourself by following simple online trading security measures.