The Internet has been a driving force in changes to all kinds of habits in the last few years. Where, for example, would the world be without email, social media or online shopping? It’s true for specific sectors, too: the trading industry has been changed to a large degree by technology in recent times, mostly for the better. Here, then, is the low-down on how technology has turned the fortunes of the trading sector around.
More instruments to trade
Perhaps one of the main ways in which trading has been revolutionized by the Internet is the sheer number of trading instruments it can provide. Contracts for difference, or CFDs, are a largely online phenomenon. These instruments track the underlying assets (which could be stocks, currencies, commodities or something else) rather than actually offer ownership of them, which means that it’s much simpler to get started. CFDs can also be applied to pretty much any asset, so it’s now possible to essentially “trade”, say, Facebook shares without actually owning anything of Facebook at all.
Trading on the go
Another way in which trading has been changed by the arrival of the Internet is the prevalence of mobile trading. Now, it’s possible to check the progress of a trade from anywhere – which is especially useful for day traders, for whom timing down to the minute can make a difference. This has had both good and bad effects, though: while it means that traders can open and close positions at a time that suits them, it has also meant that traders are perhaps increasingly tempted to monitor their trades at all hours of the day and even make impulsive decisions, simply because they can. As a result, it’s important for traders to make sure they use the benefit of mobile trading wisely and as part of a strategic, rational plan for when positions should be open and closed, rather than becoming addicted to making constant decisions.
Availability of information
In the past, traders who were looking for information always needed to go out of their way to find it. Whether it was stock tips advising them on whether to buy, sell or hold, or simply a list of the market capitalizations of major firms, seeking out information was – by modern-day standards – time-consuming in the extreme. While traders of yesteryear perhaps don’t miss what they never had, it’s thankfully now possible for modern traders to find information quickly and easily, using the web. Australian stock tips are available online over at The Bull, while many newspapers and books can now be read online as well.
The world of trading has been changed extensively by the Internet, and there’s no getting around the fact that modern trading simply wouldn’t look the way it does today if it wasn’t for computers. From the wide selection of trading instruments to the ease with which relevant information can be located and put into action, it’s easy to see why online trading is here to stay.