Nowadays, trading is inextricably intertwined with digital platforms. However, considering that the first Forex market was created in Amsterdam in the 18th century, the Internet’s involvement is relatively new. Traders now find themselves in a time where an internet connection isn’t just an advantage but a basic necessity. Since the world wide web itself has seen vast shifts in a short span of time, we can see and expect the Internet to become a bigger deciding factor in the world of trading.
Expansion and Accessibility
With the Internet came increased accessibility. Whereas it was akin to a boy’s club before, people across varied backgrounds can now succeed as a retail trader online. With just a few clicks, you can easily find a slew of forums, blogs, and online brokers who can advise you on investment decisions, which markets are risky or safe, and white papers on profitable industries. Websites like MarketWatch, The Motley Fool, and Investing.com are some of the most trusted sources for retail and institutional investors alike. There is also a whole slew of free and paid investing courses and tutorials — from beginner to advanced — that individuals all over the world can access because of the internet.
And, thanks to the advent of smartphones, traders can now manage their investments anytime and anywhere. In fact, FXCM notes that downloading a trading software can be done from virtually any digital device. In just two to three steps, budding investors can begin trading in global markets without any overhead brokerage firm charges or investment minimums. Even better, many accounts have useful features like free demo trading.
Even finding guidance and building a network is easier, as there are various digital services that act as a platform for the interested parties. Take social media, for example, which has 3.96 billion users worldwide. Currently, 80% of institutional investors use social media as part of their workflow, while 60% of new investors use the same platforms for crowdsourcing. And because of the growing interest in trading among young people, even social media platforms like Reddit are becoming a wealth of information for investors. Active forums and live chat rooms give more and more people access to information and advice on wealth building.
Convenience and Stability
Staying updated on market trends and financial movements can now be achieved remotely, regardless of the time zone. New tech on the market has even meant that the average transaction fees have plummeted because trading is now much faster. Because online trading gives traders a more hands-on approach, there is the convenience of bypassing the middleman — in this case gatekeeping brokers.
Aside from that, trading as a whole has benefited from the rise of digital online transactions because this provides better security for investors, more transparent transactions, and consistent regulations to equalise the playing field. As part of the ongoing Fourth Industrial Revolution, there is new tech coming out like A.I., which many analysts use to predict market patterns. Some online software uses a similar predictive service to help guide investors against plummeting investments. Fast Company’s piece on the development of A.I. in investment shows that it may soon be able to fully man investor’s trading, further streamlining the process.
The internet, and tech in general, has truly become a pillar in trading and much of everyday modern living. In wake of the COVID-19 pandemic, digitisation was hastened significantly as more people moved their lives online. In Stephanie Kannimel’s trend report, she notes how e-commerce, the digital currency, blockchain, and artificial intelligence saw a rapid adoption in financial services that were previously thought to be decades ahead of us.
Although restrictions are slowly lifting, the benefits and ease that the Internet provides have cemented its importance. If anything, we can assume that online stakeholders—including traders—will only continue to encourage the Internet’s continued growth.
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King's Global Markets - KGM
King’s Global Markets is a community of students dedicated to the advanced study and application of global financial markets, economics and global business.
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