A beginner trader stands more chances of losing his money to online Forex trading risks, more than the risk of losing his money to inadequate trading. While some of these trades directly relate to incompetent trading platforms and poor internet connectivity which can be controlled to some degree by the trader himself, yet most of these risks are simply beyond human control. At the top of the list of these risks is the beginners’ unawareness of the regulatory environment.
While regulatory authorities make it mandatory for every broker to first register themselves with it before commencing their operations, yet 90% brokers go without this registration and open an office in some under-developed country Like Nigeria or Congo or Somalia where there’s no one to question them, Impeach them. They obviously have their means of luring some traders, who finally learn it the hard way that they don’t have to blindly follow a broker website. Of course, they learn it after losing all their money to these broker’s unethical practices like stop-loss hunting and trades manipulations. Since the brokers are remotely located with no real existence of any physical office as such, so you don’t know where to go and break whose bones and thus the main online Forex trading risks, trading with a fake broker.
Adding to that, brokers also go bankrupt sometimes when a big fish comes from no-where with some extraordinary huge wealth and wipes off the entire broker balance with one single trade. Of course, if the broker is regulated and ethically goes bankrupt, then they aren’t liable to anyone. Why just the brokers, even if the dealing bank was to go bankrupt, then all of the customers of all of the associated brokers see the dooms day. Happened in the classic example of Bank of England when George Soros broke the vault with one single trade and took over a Billion pounds. Bank went bankrupt and poof, all money gone.
However, that’s like talking on a relatively larger scale but if I were to comment on some simple online Forex trading risks for small retail traders, then the foremost is losing your internet connectivity. It does happen at times that after opening your trade, you lose your internet and are not able to put your stop-loss. The risk is also posed from broker’s side when the cheater brokers disallow you the access to your platform after you start making profitable trades. You can very well imagine what happens to your account when your privilege of connecting to your platform is stolen away. It’s as good as stealing your money; leave aside the broker’s staff placing an unauthorized negative trade in your account or disabling a negative trade that you just can’t close.
Even more Important and the real matter of worry on the front of online Forex trading risks is the fact that anyone with good IT knowledge can steal your account password. With the rise of the Internet crimes, the world has witnessed passwords hacked and accounts broken. Since online forex account operations depend purely on Login ID and password, it’s very easy for anyone to either steal it from the broker company’s database or directly from your computer by sending you some computer tracking and files sharing malicious software. You can imagine what the fellow can do to your money if he knows your broker account password, which includes withdrawals.
However, the best and the funniest online Forex trading risks come from your own people, your family. Imagine you leaving your computer unattended when you receive a sudden phone call. By the time return, you find that your own curious son is busy EXPERIMENTING with this new software he’s found, your forex trading platform. It surely is going to make you mad to find some tens of positions, all new and all negative but what can be done? It happens to a lot of people who put their account to auto-login and are in the habit of sharing their computers and Laptops with their friends and family. Please remember that trading calls for utmost care of your account and you bear the sole responsibility of any activity in it, so it’s better that you identify all the risks associated with working online and then do your cautious best to curb those that you can. Get an alternate Internet connection, change your passwords every month and keep a printout of your trading activity every time you place a trade. If you could be vigilant here on these online Forex trading risks, then it definitely is half the battle won. Fight the rest and hope the best.