The Dangers Involved with Online Investing

Accomplished hackers who also perform online trades have been extremely industrious in the ways in which they seek to cheat the system. These hackers' intention is to increase the value of their own accounts at the expense of a stranger's account. For example, hackers who are trading online have figured out a way to use other people's money to artificially make the markets in which they have money invested rise.

The first thing that hackers of this ilk need to do is find out another person's username and password. Once they have done this, they can go into a stranger's account and make trades as often as they like in that person's name. As has been mentioned above, these hackers are highly industrious and when one method of breaking into an account is discovered and eliminated, they look for new ways in which to do this and they find them.

Jason Skepyan online investing What these hackers want to do is sell the unsuspecting victim's shares in order to steal the money. After they have done this, they have plenty of money with which to buy shares in a stock in which they are invested. As people purchase a particular stock, its value begins to rise, which is why hackers want to do this with stocks that they own. After they have caused the price to rise sufficiently, they sell their own stocks at a large profit.

As bad as the above scenario is, it is not the only negative thing that can happen on the internet in online trading according to the experts at Web-Invest. Investors also have to watch out for how they can be manipulated into purchasing a particular stock. It appears that brokers are as energetic in their pursuit of taking advantage of other people as the hackers are. How the brokers do this is to begin a discussion about the stock they want to promote.

When brokers have a stock that is not being talked about and, therefore, is not subject to being traded at a great volume, they may decide to force the issue by going into the trading website's forum and introducing the stock. What makes this strategy insidious is that the broker does not just introduce the stock under his or her own name; they create several different aliases under which they post several different comments touting the virtues of the stock. This generates interest from the other people in the forum and they begin to purchase the stock. The problem here is that the stock may not be worth buying at this point; after all, no one was buying it before the broker decided to put the idea in people's heads.

When people are trading online, they are doing it on their own without the benefit of a broker. Investors like to have this option, because they are saving a lot of money in commission; when brokers execute a trade, they charge their clients a fee for each transaction. By avoiding this, trading online can become dangerous, because investors do not have anyone to help them make the right decisions. They can also be susceptible to overtrading. Investors are overtrading when they begin to purchase stocks and then sell them all in one day when the better strategy might be to hold on to the stock for a while. Without someone to guide them, they will fall into the endless spiral of constantly buying and selling without having someone help them perform their trades in a more conventional way.

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