Written by Trading is one of the popular ways to invest. It requires enough knowledge and experience to become a professional trader, but it’s still not guaranteed that you’ll get the Return on Investment (ROI). However, aside from the fact that trading is complicated, you can still encounter other problems, such as choosing an unsecured trading broker.
Since trading involves a lot of money, trading brokers should provide top-notch security to protect their clients’ money and personal information. Besides, nowadays, many trading platforms offer various benefits. So, before you get all excited, you should ensure that they can guarantee the security of your trades.
In this article, we’ll discuss the factors you should consider when analysing the level of security of trading brokers.
1. Regulatory Compliance
The first thing you should check when looking for a trading broker is whether it’s regulated by a trusted financial authority. If a trading broker isn’t regulated, there must be something wrong about it. Usually, regulated ones offer well-known trading platforms, such as MetaTrader 4 and 5, which is another thing that can guarantee they’re regulated.
Nowadays, you can easily check the regulatory status of a trading broker. So if you’re having doubts about their operations, double-checking won’t be a problem anymore.
2. Data Encryption Protocols
Trading brokers deal with various important information, including personal details, trading data, and payment details. These are some of the basic reasons why they should have robust data encryption methods. Encryption is a method of transforming data into codes so that the information is just between the client and broker.
If you’re a beginner, you can check the site information beside the broker’s address bar. If it’s secured, it usually indicates, “Connection is secured,” or there’s a padlock sign.
In addition, the broker should also secure two-factor authentication, so that even if you lose your device, it’s not easy for others to access your trading information.
3. Secure Payment Methods
Aside from the data, the payment should also be secured. Usually, well-trusted trading brokers work with well-known payment channels, including credit cards, and online banking. However, if you do notice something different, or if the payment method is untraceable, maybe it’s time to consider other brokers, as this may result in a scam.
In addition, you can check other trading brokers for reference, in case you’re not aware of the usual payment methods. While you’re at it, you can compare the differences, and see which looks more secure.
4. Protection Against Fraud and Account Hacks
Aside from the two-factor authentication, some high-end trading brokers require a multi-layered authentication process to make sure you’re the only one who can access your trading account. Of course, this may be a bit much, but knowing your account is secured can make up for all the trouble of opening your account.
In some cases, you can access your account easier, but you need to set your biometrics. Usually, you can choose whether it’s fingerprint or facial recognition.
Meanwhile, another thing you should include in your routine is to regularly change your password to ensure the full security of your account.
5. Backup and Recovery Options
Does the trading broker provide recovery options? No matter how advanced the system is, there’s still a possibility that you may encounter a sudden system failure. When you should, you should be able to get back into the game without losing everything you’ve worked hard for.
Of course, if there are sudden changes in the market, it can’t be helped that your trade may be compromised, but there should be reassurance that you can continue where you left off. One of the signs that a trading broker offers a backup is when they have a large cloud storage.
6. Regular Software Updates
Outdated software is vulnerable to hackers, so make sure to choose a trading broker that often updates the trading site and platforms. This is essential since updates improve the overall performance of the trading site and apps. In addition, the security can also be improved compared to the previous version.
If you want to check whether the trading broker often offers software updates, you can check the latest version number of the software, and you have an idea if they have regular updates or not.
7. Reputation and Reviews
Of course, the feedback and review of the users matter. While doing some research, you can take a look at the reviews of past and current clients. If some didn’t like the performance of the trading platforms and the broker, you can check their reasons. If it’s about security, you should look for a better broker who can guarantee the safety of your trading journey. It’s better if you can find as much feedback as possible.
However, keep in mind that some reviews can be manipulated, so don’t be swayed by the good ones, especially if they’re identical and provide general ideas.
Final Thoughts
The most essential factor in looking for a trading broker and platform is the security of your trades. Even if you’ve found the fastest trading platform, it’s a bit suspicious when it comes to the accounts and payment methods, you should try looking for other options.
ABOUT THE AUTHOR
Aliana Baraquio has over 5 years of experience as a writer and market analyst. She specialises in developing beginner-friendly trading techniques and tutorials. Additionally, she suggests FP Markets as the top broker for trading CFDs and Forex.
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