Over the last decade, technology has changed many aspects of our lives. Our social lives, education, business, government – they all rely on technology to access more information and be more efficient, and trading is no exception!
Regardless of whether you’re thinking about trading penny stocks, currencies, or commodities, you’re increasingly relying on technology to understand what drives asset prices and to make better trading decisions. How? By understanding the impact of technology in today’s world, by using a large amount of information, and by relying on advanced trading tools, platforms, and analytical methods.
Going from traditional brokers to online brokers was a huge step, making the financial markets more competitive than ever and allowing them to grow at an exponential rate. Today, online brokers are in fierce competition to provide the best, most cutting-edge technologies to provide their clients with an advantage in the markets.
Let’s have a look at how some aspects of technology have changed trader and investor relationships in the financial markets, and how they influence your trading today.
Technology and Trading
Before the rise of the first electronic stock markets, traders were gathered in crowded trading floors to buy and sell assets for their clients. Now, bids and offers are done digitally, which allows smaller investors to invest small amounts and use low volume through digital channels. Online brokers have quickly multiplied, offering online trading options to retail investors. Nowadays, almost everyone can open a trading account with limited trading capital. Not to mention that you can now trade on the go, with tablet and mobile trading platforms that gather considerable computing power.
Technology and Trading research
Gathering information about a company or the markets wasn’t easy before the rise of the Internet. But now, everything is available within just a few clicks, as technology has greatly improved information availability. Advanced computerized trading terminals like Bloomberg and Reuters are now cloud-based software, easily accessed from any computer, providing users with comprehensive real-time market information. Big data is now used to collect and analyze information on a massive scale to better manage investment portfolios, or measure market sentiment.
Technology and Financial education & freedom
With vast public information access and online brokerage platforms, traders now have greater control over their investments. Technology also allows for people to more easily raise their financial literacy, through easily available financial information and personal finance apps. Now, investors can make more informed decisions to make their capital grow and invest for the future. They can also monitor their positions online to react quickly to any changes in market conditions.
Technology and Algorithmic trading
Algorithms are at the core of faster and more powerful analytical tools, as well as automated trading methods, providing a larger role for quants and computer scientists in the financial markets. Traders wanting to invest in the markets with a non-discretionary method can now do it with automated trading techniques, based on algorithms. Trading robots have been developed to help these traders rely on ultra-rapid trading execution and techniques that are less biased by human emotions. Many algorithms are also based on artificial intelligence and machine learning to gain a competitive edge in today’s modern investing.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.