How safe is it to invest online?
Improvements in advanced technology have opened up a wide range of opportunities for people all around the world. Faster connectivity speeds mean we can get online more easily from almost anywhere; electric and hybrid cars are helping to reduce our environmental impact. And streaming services mean our favorite movies and TV shows are available at the touch of a button.
These are just three rudimentary examples of how technology has moved on in recent times, and its continued development affects people and businesses from all walks of life.
That is certainly the case in forex and CFD trading, where billions of dollars change hands every day within a virtual space.
Without advances in technology, the sector would not be able to operate as it does, but there are risks for investors to be aware of, too – and not just in terms of the profitability of their trades. So, just how safe is it to invest online?
1. What are the risks?
Trading stocks over the net brings inherent risk. For example, you might open yourself up to identity theft or your computer becoming the victim of a virus or malware. In the latter instance, a thief may be able to place spyware within your software that tracks your keystrokes and subsequently gives them access to your passwords and other sensitive information.
A recent report found there to have been 3,800 publicly disclosed data breaches in the first half of 2019 – exposing 4.1 billion records.
This number of breaches represented a 54% increase from the same period in 2018, while three of those breaches were among the top 10 largest in history. With these troubling statistics in mind, and with such large sums at stake on the stock market, robust safety measures must be put in place.
2. How brokers can help you
There are several ways your forex or CFD broker can safeguard against the risks mentioned above. They can store encrypted data in secure facilities behind firewalls, while they may also encourage you to implement a two-step authentication process.
Automatic logouts are also widely used by investors as a way to exit their accounts if their trading platform is inactive for a certain period – usually around 10 to 15 minutes.
3. How you can protect yourself
You can improve your ability to trade safely online in a few simple ways – for example, using a strong password. It’s always tempting to use something familiar to us that we can easily remember. Still, a mixture of numbers and letters – in lower and upper case – we will create it incredibly hard for hackers to gain access to your data. As mentioned above, two-step authentication is a sensible approach, as is installing robust anti-virus software.
The vast majority of people trade safely online, but it’s crucial that you at least familiarise yourself with the risks involved to make sure you don’t fall victim to any wrongdoing.