Online Trading – Staying Safe
Using Online Trading Apps Safely
Chris Ryan: There’s been a lot of discussion about, online trading and, getting involved with different aspects of trading outside the traditional methods.
[00:00:10] I’m curious as to what you think of that from a safety perspective, when you’re thinking about using apps, you’re thinking about using entities that are the non-traditional trading mechanisms, in light of the game stop situation. What should individuals be cognizant of?
[00:00:28]Craig Peterson: There’s two different parts of this.
[00:00:30] Chris. I want to tell you two stories, personal stories, friends, and family members of mine. And we’ll start by just saying, this is a new technology and when you get right into it, I’ve looked at the analysis of some of these trading apps, including some of the big ones, including Robinhood and others.
[00:00:49]Many of them are not encrypting our data. That’s just crazy. Some of its encrypted, account balances might not be encrypted. Here’s the bottom line on this.
[00:01:00] There’s always going to be security problems, if you are going to be doing online banking/ trading. Make sure you’re using, what we would call a secure platform or a more secure platform. Which means do not ever root your phone.
[00:01:19] People are using their iPhones or Androids all of the time, Androids, particularly, people try and gain master control if you will, over that phone. So they can do anything at that point, you’ve gotten around even the most basic security measures. So don’t do that.
[00:01:37] The other thing that you can and must do with these online trading apps is use two factor authentication. Now there’s a few different types.
[00:01:47] The most simple is have it send you a text message when you go to log in, but I have to warn you that is not safe. It’s not safe because it’s sending it to your phone and your phone number is attached to that.
[00:02:02]Many people are trading everything from Bitcoin through stock they have very large portfolios. What’ll happen is it’s worth it to them to steal a hundred thousand dollars from you or even 50 or 20,000. In some cases we’ve seen it as low as. 5,000.
[00:02:21] It’s worth it for them to go to the trouble to get the phone company to switch your phone number to the bad guys burner phone.
[00:02:32]Now when they go to log into your account. Guess what people aren’t doing the basics, they’re not using unique passwords, in many cases. What will happen is they’ll go to your account online and it’ll ask for the username. They’ll try to use a name they found on the dark web for you. They’ll try the password they found on the dark web for you. Maybe they’ll try a few different passwords. They’ve compromised other machines so they can try different passwords in different places. So they don’t get caught.
[00:03:01]Now it sends a text message, but it’s not coming to your phone. It’s going to the bad guy’s phone.
[00:03:07]Use an authenticator app, or use a hardware token. Some of these online trading places and banks they’ll send you a little key fob, a little thing that goes on your key chain and it has a display with a number on it. That number continually changes it’s every 30 seconds and you have to type that number in,that’s much, much safer. That’s real two factor authentication.
[00:03:31] Now real quickly, two people in my life that have been affected by this right now. One of them had an account, an online brokerage account and her stock had gone way up and she decided that she needed to sell her stock.
[00:03:51] She didn’t ask me, she didn’t ask her husband. Who’s a bit of a techie guy.
[00:03:54] She was going to do it herself. She went to a Facebook group that she found online about how to go ahead now and cash out. They asked her, in the Facebook group, there’s a few things we’re going to need to do in order to help you out.
[00:04:06] First of all, what’s your account number? Secondly, what’s your password? She gave it to them.
[00:04:12]She instantly lost $6,000 from her account by just doing something. I’m sorry here, but dude, you don’t go to Facebook to get help with training.
[00:04:23] Don’t ask how do I get Robinhood? What do I do with it and all that. It is not the right place.
[00:04:29] Go directly to the company. Pick up a phone. You can’t trust some of this stuff online.
[00:04:37]Another example is a close friend. He had been using Robinhood for trading. He had bought a bunch of stock and it included AMC. Of course this is a movie theater chain. It had been targeted if you will, by these people on this subreddit. AMC had finally gotten up to breakeven point and so he decided to sell. He sold and okay, great, fine.
[00:05:05]He now regrets it. That’s a big problem. I’ve seen with him before. Now, he’s a millennial and nothing personal guys, but he trusts these platforms. He trusts what they’re saying on the subreddit.
[00:05:18]He’s putting money he cannot afford to lose into this Robinhood app that lets him buy and sell stock. That to me is a huge concern.
[00:05:29]There’s a couple of examples.
[00:05:31] Make sure you know what you’re doing. Day traders lose money. Most of them lose money. It’s that simple.
[00:05:40]Maybe buy and hold long, maybe follow what the real professionals do.
[00:05:45] Do check out the basics. Don’t just buy it because it’s going up.
[00:05:50]Also basic security stuff, guys use a password manager, unique passwords for every site, and full two factor authentication.
[00:06:00] These apps are not completely to be trusted.
[00:06:02]Don’t use it on a computer that you use for everything else. Try and have a machine that you don’t use for anything else, and if you can.
[00:06:11] I don’t make a dime by saying this, but use Apple equipment. They don’t make money off of you. They’re trying to keep you safe.
[00:06:18] Get an iPhone, get an old iPhone. If you can’t afford a new one they’re rather than inexpensive, usually free.
[00:06:25] Get a Mac.
[00:06:26]Don’t use the same computer for online trading that you use for going to Facebook and everywhere else online, because it might be compromised.
[00:06:34]All right. Take care guys.
[00:06:36]Have a great day.
[00:06:37] We’ll talk later. Bye-bye.