The impact technology has had on every aspect of our lives has been staggering. Trading has not been spared by the revolution. In the past, trading used to be the preserve of a select few. However, over the past few years, technological advances have changed the landscape in trading. Trading is easier and more importantly, accessible to a wider audience according to Kara Ordway – a financial expert with more than a decade of trading experience. Let us examine how trading has changed in the past couple of years as a result of tech:

Online trading: Buying and Selling made easier

A few years ago, if you wanted to buy or sell a security, you had to call your broker to place an order for you. Then to know how your portfolio was performing, you had to wait for your account statements in the mail. It was slow, tedious, and expensive.

Fast-forward a few years and we are now in the age of online trading. What is online trading? It is the system of trading where all you need is an internet connection and a browser or application. Once you have those, choose the securities you want to buy or sell, find a broker with the lowest fees, and finalize the transactions yourself with the click of your mouse. Online trading has gone on to give rise to mobile trading which we will examine later on in this text.

Stephen Innes, a forex expert with CFD and OANDA Australia and Asia Pacific reckons that electronic FX trading gathered momentum after the Global financial crisis fuelled by technology. Online trading is everything manual trading isn’t; fast, convenient, and cheap.

Information Galore

In “the olden days” information channels were slow, ineffective, and expensive. Investing was left to the rich and the institutional players because the rest of the populace couldn’t “join the club” because, among other things, reliable information was expensive and hard to come by.

However, we are living in the Information age. It is called that because never has it been easier for people to generate and access information as quickly as they can today. When it comes to investing:

 

• You can access information regarding how the markets are performing in real time.
• You will be informed about significant geopolitical events that affect your portfolio in real time.
• You can monitor how other experienced traders are making their trades.
• You can readily access educational information pertaining to trading if you are new to investing.

 

Information is readily available for all who are keen to partake. This was not always the case and we have the technology to thank for it.

Mobile Trading

The popularity of the smartphone has had a seismic impact on how we shop, how we travel, how we listen to music, and in our context here, how we invest. There are mobile trading apps that rely on an internet connection to close trades. These apps enable you to trade wherever you are as long as you have them installed and have a reliable internet connection.

Trading on your smartphone affords you some advantages:

• You can trade wherever you are. You don’t have to be in the office.
• You can monitor your portfolio at all times.
• You can make your moves quickly and conveniently if you are dealing in short-term positions.

Markets are open 24/7

This one particularly goes for the forex markets. Forex markets are open round the clock because when one market closes, another one on the other end of the globe is open for business. The internet never sleeps and it enables you to trade at all times. You can access a virtual trading floor that never shuts down. During the day, you can trade on the London market and during nightfall, you can be on the Tokyo exchange making moves and earning money.

Robo Advisors

In the trading world, robo advisors are the norm these days. A robo advisor is an algorithm that manages a portfolio giving managers a level of automation that was impossible in the past without compromising on safety. By safety, we mean the ability to keep things in check as per the investment strategy employed. Some algorithms have been known to outperform the actual managers because they act based on hard facts devoid of emotions. They still need oversight but they do very well on their own.

Conclusion

Technological advances show no sign of abating. With the development of artificial intelligence, we may have artificial portfolio managers that do all the heavy lifting as we sun ourselves on the beach sipping fizzy drinks.

While it still comes with some downsides, we can appreciate that trading is much easier and more rewarding with technology than without it.