How to Keep Your Money Safe with Trading Apps


Michael B. Cohen

Vice President of Global Operations


Trading apps are popular, but are they safe? Do research, sign up with regulated brokers, and ensure they use encryption. Seek fund recovery if there is a dispute. 

The COVID-19 crisis has been a catalyst for many new trends, including the growth of e-commerce and online trading. People at home due to lockdowns often were looking for new things to do and ways to make money. Although online trading should never be a substitute for a real income, there is no doubt that new trading apps emerged to meet the rising demands. 

The question on everyone’s mind regarding trading apps is, “Is it safe?” There is no doubt that many trading apps are vehicles for cyber crimes, such as phishing and data theft. However, there are many others that are licensed, have a strong reputation and provide value for users. The key to staying safe with trading apps is to perform due diligence and research all financial services before using apps or opening brokerage accounts. 

Even with research, problems can arise. Some apps claim to be regulated when they aren’t or people can make mistakes and take a risk with an unlicensed platform. Not only can fraudulent practices go undetected at first, but disputes can arise between customers and brokers. In these cases, it is important to file a complaint and seek a reputable financial company that offers fund recovery services. 

Speak to professionals that can and act as an advocate. MyChargeBack gives guidance to consumers who are trying to recover their funds from merchant disputes, forex scams, or other types of fraud. Talk to MyChargeBack professionals and get started on fund recovery

A Security Consultants Verdict on Trading Apps and Safety

Alejandro Hernandez, security consultant at IOActive, carried out extensive research into trading platforms. He examined 16 desktop applications, 34 mobile apps and 30 websites to determine which were safe, which were not and to give a general picture on how safe trading aps are. 

Hernandez reached the disappointing conclusion that on average, trading apps were much less secure than banking apps in protecting client information. He also found that, while larger brokers were not perfect in this area, there did seem to be a correlation between larger, more established brokers and greater data security, higher quality trading services and usability. 

The main problems he found were concerning encryption, denial of service authentication and session management. He found that nine desktop applications (64%) and two mobile apps (6%) did not use encryption when transferring data. This means that a third party on a public platform could easily intercept information and commit data theft. 

This is an important investigation that provides a cautionary tale about verifying claims made by brokers and trading apps. It should be kept in mind that, although the results were published recently, the research began a few years ago and companies, brokers, and apps may have upgraded their security since then. 

Nevertheless, Hernandez’s conclusions are enlightening and emphasize the importance of confirming and checking that service or app is consistent with claims, such as adhering to high cybersecurity standards. 

Two Types of “Safe” Trading Apps

Hernandez examined apps belonging mainly to regulated brokers from the standpoint of cybersecurity. This is one kind of safety – ensuring that customer information is safe from hackers or third parties. 

The other type of safety, however, concerns not just cybersecurity but dealing with financial services that will not exploit the customers and engage in fraudulent behavior. 

Investigating security in this sense involves dealing only with regulated brokers and examining the quality of their licenses, whether they were issued by top-tier regulators and considering whether there are major complaints issued against them. 

For instance, a trading app can use encryption to shield customer data from outside parties, but this does not necessarily mean that those behind the app are scrupulous and are not trying to take advantage of traders. 

By the same token, as Hernandez pointed out in his report, brokers can be regulated and offer otherwise dependable trading services on behalf of their clients, but they may be lax in cybersecurity and protecting customer information. 

It is essential to use trading apps issued by financial services that are regulated, have a solid reputation, and operate with the highest standards of cybersecurity protection, including encryption. At the same time, traders should take every opportunity to protect themselves by activating features such as two-factor verification and avoiding connecting to trading apps on public networks. 

Safety Tips for Trading Apps

The following are important tips traders can follow to protect themselves on trading apps

  • Insist on a license for brokers and platforms
  • Research the company’s reputation
  • Know who is behind the platform
  • Enable extra security measures such as two-factor identification and touch ID
  • Verify that the app uses encryption for all customer data
  • Do not trade over public WiFi networks
  • Use a strong password and change it from time to time
  • Enable automatic logout after time has passed
  • Enable automatic email or SMS notifications of activity

What If Something Goes Wrong with a Trading App?

If you have discovered that your data has been compromised, cancel the app right away and contact professionals. Change passwords and ask for an expert to assess your risks. If a trading app turns out to be fraudulent or if you have a dispute, file a complaint with regulators and authorities and seek fund recovery assistance. 

It is important to raise the alarm about problems with a trading app. Financial services should assume the responsibility of keeping clients safe from security breaches and should not engage in practices that mislead them into making trades that are not to their advantage. Inform the company of the problem, file a complaint with relevant authorities and write a review. Often companies will be quick to respond if they feel their reputation is at stake. 

If the problem is not resolved, seek the aid of professionals that can help you with fund recovery. Consult with MyChargeBack experts and get started with your claim. We have extensive working knowledge and relationship with banks, financial regulators and law enforcement agency cybercrime units and can improve our prospects of getting your money back. Talk to our professionals today.