Ways to Protect your Trading Account?

The trading account is an indispensable tool for purchasing and selling stocks, bonds, mutual funds and other securities through the stock exchange. In addition to being the gateway for participating in the secondary market, your trading account also holds your investment capital safely.

With instances of cyber attacks and other malicious online threats on the rise, learning how to protect your trading account is of paramount importance. Fortunately, there are many ways through which you can safeguard your trading account. Here’s a detailed guide outlining the various tips and techniques you can follow to keep your account safe.

Reasons For Protecting Your Trading Account

Now, before we look at the different ways to protect trading accounts, let’s first try to understand why shielding them is important.

• Cyber Threats

  The advent of the internet has brought along several cyber threats like phishing, hacking and malware injection, among others. The primary aim of such malicious activities is to gain access to confidential and sensitive information. By protecting your trading account, you can prevent yourself from becoming a victim of these cyber attacks that threaten to steal your financial information.

• Loss of Investment Capital

  As you’ve already seen, your trading account doesn’t just contain sensitive financial information. It can also be used to temporarily store your investment capital safely. When you protect your trading account, you’re essentially preventing malicious actors from gaining access to your hard-earned capital.

• Unauthorized Access

  When you don’t have proper safety measures in place, unauthorized individuals can easily gain access to your trading account. This can lead to unauthorized trades being placed without your knowledge, which can result in huge financial losses.

• Imparts Confidence

  Knowing that your trading account is well protected from all forms of cyber attacks can give you confidence. Trading confidently without having such threats looming over your head gives you psychological comfort and can help you perform better.

• Regulatory Guidelines

  The Securities and Exchange Board of India (SEBI) and the stock exchanges require traders to mandatorily follow certain safety protocols. When you protect your trading account with the recommended safety measures, you ensure compliance with the stated regulatory requirements.

Tips and Techniques To Protect Your Trading Account

Now that you’re aware of the reasons to protect trading accounts, let’s dive into the different techniques you can use.

• Sign Up With Reputable Trading Platforms

  The stockbroking platform you sign up with can have a huge impact on the safety of your account. Always verify the credentials of the broker before signing up. Read through user reviews to get an idea of a trading platform’s robustness and reliability. Ideally, a stockbroker should have a strong track record with proven security measures in place.

• Use Unique Passwords

  One of the best ways to protect your trading accounts is to use a strong password. When you set a password, consider using a combination of numerals, upper and lower case alphabets and special characters. Unique and strong passwords make it hard for malicious actors to gain access to your account.

• Activate Two-Factor Authentication (2FA)

  Two-factor authentication (2FA) is a supplementary security measure in addition to your password. When you activate 2FA, a unique one-time password (OTP) is generated and sent to your registered mobile number or email ID.
  You can gain access to your trading account only if you enter the correct OTP. This extra security layer makes unauthorized access a lot more challenging. All stockbrokers are currently required to offer two-factor authentication for all their trading accounts.

• Update the Software Regularly

  Old and outdated software can have loopholes that hackers and other individuals with malicious intent seek to exploit. You can effectively protect yourself from cyber threats by updating all of your software including operating systems regularly.

• Be Wary of Phishing Scams

  Phishing is a kind of cyber attack where attackers use various techniques to trick you into revealing confidential and sensitive information such as your user credentials. Phishing commonly occurs through unsolicited emails, text messages and even phone calls. To protect yourself from such scams, always verify the authenticity of emails and text messages before providing confidential information.

• Safeguard Your Devices

  Safeguarding the devices you use for trading is crucial to protect your trading account. Consider protecting the devices using a strong password and scan them for viruses and other malware periodically. This should help prevent unauthorized access to your account via the devices you use.

• Always Use Secure and Encrypted Networks

  Trading on public computers or unsecured internet connections can put your account at risk. Instead, consider accessing your trading account using your home’s private internet connection. You can also use a secure and encrypted Virtual Private Network (VPN) to ensure better safety.

• Keep an Eye On Your Account

  Monitoring your account regularly is one of the easiest ways to protect your trading account. Keep a close watch for unauthorized trades and fund transfers. Notify your stockbroker immediately if you encounter any kind of suspicious activity.

Conclusion

There you have it. These are some of the simplest and easiest measures that you can employ to protect your trading account. Similar to technology, cyber threats are also evolving constantly. As an investor, you must stay vigilant and informed of the various techniques that malicious actors employ to gain unauthorized access to your sensitive financial information.