Online trading is very much “in” today. People from various parts of the world are now engaging themselves into online trading. However, online trading also has some dangers or potential threats associated with it. It is advisable to choose only trustable brokers so that the possibilities of such risk can be reduced. Here are some of the risks that are involved:
- Trading with Foreign Countries: Trading with foreign countries has a lot of risks such as geographical risks and risks related to currency involved in it. It is important to choose trustable brokers (optionmag.fr/actualites/etoro/) so that they can guide you with the needful.
- Creating Retirement Accounts: A retirement account is something which everyone would like to open. Creating such an account should not involve any extra yearly fees, maintenance fees or other such charges. Some brokers ask you to pay in this regard and such extortion of money can be considered as a danger of online trading.
Such brokers should naturally be avoided.
- Automated Stop-picking: Many brokers help you to take the decisions related to investment by the method of stop-picking. This is mainly done by back-testing the program data i.e. going through your past records. This is not a logical method of predicting and success derived in this method is merely a co-incidence. This in fact increases risk considerably. An online investor should thus beware of this kind of brokers.
- Fake Confidence: Some investors start trading online with practise accounts or demo accounts. The practice accounts are similar to real accounts except for one difference- they use fake currencies for the trading instead of actual money. The aim behind this is to make the users friendly with the system of trade without losing any money. You will learn from the mistakes that you make here and will not repeat them in the future while dealing with real money. However, the risk involved here is gaining too much money will make you over-confident and will eventually prompt you to risk a lot while playing with real money. So, you should go for brokers like Xtradeor even iq option who do not allow you to create such fake accounts.
So these are the dangers of online trading which all of must be aware of. In order to keep ourselves safe from them you must choose a trustable broker for investment.