Best cybersecurity practices for forex trading in South Africa
The Covid-19 pandemic has virtually brought the world together. As a matter of fact, it digitally brought everyone to the same stage of survival and earning bread-butter. The result everyone has is seamless interaction across the globe backed by technology which has given people the power to earn from their convenience and knowledge.
Forex trading, to be fair, is nothing new; however, it has gained traction in recent months. For a good cause, one may assume, since the trading charts are only shining greener every day in terms of the number of traders. Per reports, the global market for trading has nearly crossed the mark of $17 trillion, followed by a rise in the number of traders on forex trading platforms – web browsers, mobile applications, or brokes.
Having said that briefly, it is now important to note that since a major portion of forex trading is happening over the internet with no or little involvement of another human, there is a dire need to understand the level to which cybersecurity is required by traders, often referred to as eTraders in the modern era.
Best practices for forex trading can include checking a platform for having regulatory approvals, fulfilling compliance requirements, using strong passwords, and understanding types of attacks that will ultimately result in forex trading profit for traders.
Understanding Cybersecurity Risks In Forex Trading
The key is to be vigilant at all times when trading in forex over the internet. It is hard to imagine another way for forex trading, but words had to be spoken anyway. Some common types of cybersecurity risks in forex trading are stealing funds and/or personal information of the traders. These are then misused to either cause more severe damage or vanish with the fund altogether.
The manner in which these threats come to a forex trader is not surprising at all; the same has been described below for a better understanding of forex traders.
Forex traders may be targeted by hackers through an email that appears to be official, but it is not. This could be done by posing as a banker, internet service provider, or in this case, forex broker.
Software may be notoriously installed to cause disruptions in the practices of forex trading, leading to the loss of millions of dollars of funds. Be it a computer or mobile, anything can be disrupted with malware.
Social Engineering Attacks
Specifically to forex trading, Social Engineering Attacks deal with manipulating the forex trader psychologically so that they perform certain actions even if that means losing money in the future.
Another manner to fool forex traders is the creation of a duplicate website of the broker that looks almost the same as the original one, making forex traders believe that they are actually accessing their forex broker and not a hostile element on the internet.
The manner of executing the attack may differ, but the ultimate objective is always to make the trader suffer. The potential consequence is that traders end up losing their hard-earned money and also their digital identity.
Forex markets, on the other hand, end up losing their reputation since the trading community begins to assume that there are more threats as compared to returns on their investment.
Best Practices For Ensuring Cybersecurity In Forex Trading
Admitting for a moment that forex trading has issues of cybersecurity within the ecosystem cannot be taken as a downside that there is nothing traders can do about it. Forex traders can take a protective approach in practicing forex trading under cybersecurity.
Get the Basics Clear
Meaning, set up a strong password when registering on a platform that is owned by the regulated forex broker. For instance, include special characters and use small-cap alphabets along with numbers. Needless to say, avoid linking passwords to something personal.
Enabling two-factor authentication is one of the best practices a forex trader can look into. Like social media, forex brokers with the facility of 2-FA allow their users to receive a message or an email to approve the sign-in activity. The request is rejected if the trader does not identify the action of sign-in.
Softwares or mobile applications owned by forex traders often roll out updates. These deal with fixing bugs or patching the loopholes that could otherwise leave the platform along with traders vulnerable. Issues can be reported directly by traders to the developers. Another way, or rather an infamous way, is to know how someone hacked into the system and then fix it to avoid further damage.
This also gives forex traders a chance to refresh their user interface for an enhanced and smooth experience. This cannot be confused with an update always fixing the vulnerabilities. It can also be to integrate several tools and features that have been demanded by traders. All and all, updates should be looked into by traders.
Not to beat around the bush, Virtual Private Networks can help encrypt the data of a trader over unsecured networks. Using VPS can come in handy for forex traders, provided they first gain basic knowledge about it.
People on the other side are not visible while interacting with them over email. There is one way, though, in which forex traders can ensure that they are interacting with an authentic broker. Check for the structure of the email. Most professional forex brokers have a way of introducing themselves in a professional manner instead of saying, Hello, Dear. That is a red signal for every email communication, no matter the situation.
Urgency is created only by those who want you to take quick action without giving it a thought for a single second. Easier to guess such emails should be ignored with no information about trading shared with them.
Avoid Suspicious Elements
Elements here for forex traders refer to links and documents that are sent to them. For instance, an email may ask forex traders to click a link that will redirect them to withdraw their funds. First of all, that rarely happens since the official platforms are the only source for taking all the actions. Second, suspicious links contain the wrong domain or a different misspelled domain. Such links should be avoided by forex traders in South Africa.
Documents are sent only if required, most of them also being available on the platform. Forex traders should avoid downloading unidentified documents – zipped in a folder – so that the probability of unknowingly downloading malware goes down.
Information is unlimited mostly because there is a lot to store and analyze for the future. A lot of forex brokers design their platforms dedicated to the way in which traders can revisit their strategies in terms of hours or even months. That is the safer way, but forex traders may choose to store other types of information – payment or customer ID – someplace where no one else gets access.
Simply put, a print can be taken when a bank shares the certificate of a savings product instead of going around and keeping it in the draft. Hardcopies may not always be possible except that the core remains certain of how information should be stored by forex traders.
Participation in online forums or online discussions on different social media platforms is now common. Irrespective of how the market performs, everyone wants to showcase the level of intelligence they possess on the internet. This comes out as a nice sign if points are productive; however, it could ruin everything if forex traders are not careful while talking with others.
Limiting the exposure is the best thing forex traders can do if the capacity to hold on to their social urges is pretty high. Anything said on the internet can end up coming to harm forex traders in unexpected ways.
All these practices for a safer forex trading experience are subject to updates depending on what kind of cybersecurity threat comes up in the future.
Choosing A Secure Forex Broker
Choosing a secure forex broker is important to make sure that the cybersecurity threats are reduced, funds are safe, and data is not shared with a hostile third party. All the regulated forex brokers in South Africa operate under the Financial Sector Conduct Authority. Similarly, forex brokers in other regions are regulated by the respective regulatory authorities of the region.
This sets up a reputable tone for their functions and guarantees the security of forex traders.
Other pointers that can be considered to know if a forex broker is secure or not are:
- Commissions – Spreads
- Leverage – Margin
- Ease & speed of deposit/withdrawal
Every reputable forex broker in South Africa would be registered under the FSCA, following all the legal compliance and keeping sufficient margins for their traders.
Cybersecurity in forex trading is important to make sure that the funds are invested in a safe environment and that all the personal information of forex traders is securely encrypted to avoid any kind of theft. Measures to implement cybersecurity should therefore be taken as they serve benefits not just to traders but also to the market at a macro level by preserving its reputation. Forex traders are also recommended to take all measures possible to avoid falling into the trap.