Online trading has become a popular investment option among millions of people worldwide. It had a market size of US$9.32 billion in 2020. Also, it had an expected compound annual growth rate of 6.4 percent until 2026.
However, are there potential cybersecurity risks associated with online trading? This article delves into this question and more. It also discusses best practices to ensure the security of your transactions.
Dark Sides of Online Trading
Cyberattacks can have profound implications for traders’ financial security and personal data. Here are some of the most pervasive types of attacks you must be wary of:
Phishing
In 2022, we saw a record-breaking surge in mobile phishing incidents. For instance, over 30% of mobile users encountered such threats each quarter of the year.
Phishing involves fake emails or messages that appear to come from legitimate sources. It could be your trading platform provider or your bank. Thus, hackers can access your account or install malware on your device if you fall for their tricks.
In March 2022, cybercriminals hacked customers of a cryptocurrency exchange platform through phishing. So they sent emails redirecting users to a fake website resembling the actual login page. It prompted customers to enter login details. Several customers had their cryptocurrency stolen as a result.
Malware
Malicious software can infect your device and perform various harmful actions. It can steal your data or hijack your transactions. Also, hackers can deliver malware through phishing emails, malicious websites, and infected downloads.
There were 5.5 billion malware attacks reported globally in 2022. For example, hackers targeted users of financial trading software in April 2022. It was a supply chain attack that infected the software with VeiledSignal malware. Thus, malware compromised the desktop app and stole customers’ credentials and funds.
Man-in-the-Middle (MITM) Attacks
Hackers can intercept the communication between your device and your trading platform. On top of all, it allows them to manipulate orders, steal information, or divert funds.
Watch out for personal conversations online, as hackers can intercept them. In 2019, hackers targeted users of a popular messaging app using an MITM attack. They exploited a vulnerability in the app’s voice call feature. Hackers installed spyware on their devices, granting access to messages and other data.
Identity Theft
Hackers can use your stolen information to impersonate and access your accounts. They may get your data through phishing, malware, social engineering, or dumpster diving.
In 2022, IdentityTheft.gov received 1.1 million reports of identity theft. The most reported categories were a credit card, loan, and benefits fraud.
Online traders may be at risk of identity theft. The incident could compromise credit cards or bank accounts. Hackers could also use your personal information for loan applications. The consequences of these cyberattacks can be severe. Additionally, traders could lose money, assets, reputation, privacy, or legal rights.
Online Trading Best Practices for Staying Safe and Secure
Online trading is an exciting and lucrative activity. But it’s not without risks and challenges. Thus, to protect yourself while trading online, you should follow these five best practices:
- Use strong passwords and avoid password reuse. Try to use a password that’s difficult to guess and contains letters, numbers, and symbols. Use a different password for all accounts; change your password often. Using a reliable password manager to generate and store passwords securely is advisable.
- Enable two-factor authentication (2FA). 2FA makes you enter your password, and a code is sent to your phone or email. Enable 2FA on your online trading account to cut the risk of unauthorized access, data breaches, and other security incidents.
- Use encryption and secure websites. Encryption protects your personal and financial information from hackers, eavesdroppers, and identity thieves. Also, you can use encryption by using a virtual private network (VPN). Only use secure sites with HTTPS and a padlock icon in the address bar. These websites encrypt the data you send and receive from them.
- Watch out for suspicious emails, links, and attachments. Always verify the sender’s identity and the website’s URL before entering any information.
- Use antivirus software and firewalls. These tools protect your devices and accounts from malware, viruses, and other threats.
How to Be a Smart Online Trader
Being a savvy trader requires more than luck. It involves knowledge, discipline, and strategy. Additionally, these tips can help you become a clever online trader:
- Do thorough research and due diligence before trading. Verify your broker’s credibility and reputation and your platform’s security and functionality.
- Use a reputable online trading platform. An excellent online trading platform should provide a user-friendly interface, high security, and privacy.
- Monitor your accounts for any unauthorized activity. Check for signs of unauthorized or suspicious transactions or changes.
- Know when to seek professional advice or help. Consult financial advisors, mentors, or analysts for insights, tips, feedback, or support.
By following these tips, you can become an intelligent online trader. So successful online trading is not only about making profits. Also, it’s about managing risks and protecting your investments.
Petr is a serial tech entrepreneur and the CEO of Apro Software, a machine learning company. Whenever he’s not blogging about technology for itechgyan.com or softwarebattle.com, Petr enjoys playing sports and going to the movies. He’s also deeply interested in mediation, Buddhism and biohacking.