Trading is an everyday activity that many people take part in. Whether it’s used to support commerce, or as a source of income, trading has become increasingly popular over the years.
Unfortunately, online Forex trading can be challenging to perfect for some people who are not familiar with how it works. It is why there are common trading problems throughout the UK that need fixing.
Common Trading Problems:
Three main problems dealing with trading in the UK today:
- technical errors,
- fraud/scams, and
- tax evasion.
These are all severe issues that cause thousands of pounds not to reach traders or legitimate companies.
The first common problem with trading is technical errors. If you have ever tried to make a trade on an online marketplace before, then you might know that there can be a slight delay between making the trade and it happening. It is due to technical errors, which commonly include a failure of an order to leave or arrive at its destination, incorrect cancellation of orders trades not matching up (in terms of price), and settlement delays for leveraged products such as Contracts for Difference (CFDs). Saxo’s capital markets are large enough to support your trading needs.
So How can we Fix These Problems?
Increasing the Speed of Trades
Increasing the speed of trades can be done by reducing how long orders stay in a system before they are cancelled or fulfilled. Reducing this length to a few seconds would reduce errors and make it easier for traders to make money.
Another way to fix this problem is to eliminate order delays, commonly used to protect market makers from losses. The problem with these delays is that they prevent traders from seeing available outlets for them to make money. They also allow prices to deviate slightly from their “true” value before trades are executed. This causes traders to lose out on profits, but it has also been known to cause flash crashes that are highly detrimental to traders.
Stopping Fraudulent and Illegal Trading Activity
Since trading online is so popular, it has also become common for fraudsters to steal money. It comes in many different scams such as phishing, market manipulation, insider trading and Ponzi schemes.
Thankfully each scam can be stopped by implementing new regulations that would make it harder for criminals to carry out these acts. For example, since May 2018, CFD providers have increased rules when trading with customers to stop any market manipulation. It includes preventing traders from borrowing money to trade on leverage products which is an excellent step towards stopping illegal activities in the industry.
Closing Tax Loopholes
The final common trading problem is tax evasion. This usually occurs when traders either don’t realise they need to pay tax on their profits or deliberately dodge paying taxes by not reporting it. The government is losing money and missing out on potential revenue, which needs to be addressed if we want a healthy economy.
How Can We Fix Tax Loopholes?
To fix this common trading problem, we can implement stricter and more detailed laws and regulations. For example, making sure that anyone who makes over £20,000 per year pays at least 20% of what they make in income tax would mean fewer people avoid payments and more money for the government.
Overall, you can fix all of these standard trading problems by implementing new measures to improve speed, stop illegal activity and reduce tax evasion. It would make it easier for businesses to trade, which is excellent for the economy.
As you can see, many common trading problems need to be fixed. These problems cause unnecessary hassle for traders and companies who want to buy and sell goods quickly and safely. Implementing new regulations that will reduce the length of time orders stay in a system, stop illegal activity, and reduce tax evasion will make it easier for businesses to trade with each other, making the UK economy stronger.