Online trading in commodities and forex has had a checkered journey and it has seen many twists and turns. While technology has been the greatest enabler as far as online trading is concerned, here too there have been many innovations worth mentioning over the past few decades. Though today retail online trading is extremely common, it was not the same even around 14 to 15 years ago.
When there were moves to launch the first online trading platforms for retailers, there was a hue and cry from many quarters. The regulators in particular were quite tough to deal with and they certainly had good reasons to raise questions on the same. Today because of innovations in products, systems and technology online trading has grown from strength to strength. It is now a $ 4 trillion dollar market and is growing at a rapid pace.
Bringing Down Exchange Rate Costs
The cost of exchanging currencies is again something which small traders in particular found extremely difficult to handle. However, this has now become a thing of the past and the main reason for change has been the internet. But there were many large banks and fat currency dealers who still managed to keep a healthy spread for retail customers. All these changed gradually when inter-bank exchange rates were provided online. This brought down exchange rates quite aggressively and when compared to the early 1990s and perhaps even the early 2000s the commission payable has come down quite drastically.
The Emergency of Online Trading Tools
When we talk about we cannot the innovative role played by various online trading tools. They have redefined the contours of online trading. Some reputed service providers like CMC markets have certainly showed the way forward by helping retailers in particular learn more about the various tools. Let us have a look at a few such tools which perhaps are the greatest innovations in this field.
If you are into stock buying and selling, then you must have a closer look at tools like stock predictor. It might look all figures, graphs and charts, but once you get into the basics and understand how it functions, it certainly could set the road ahead for you. It comes with a number of technical indicators and there are a number of such tools which have around twelve such predictors. They also come with one click buy and sell options which make it possible to apply a trading strategy once a decision has been made.
Use Of Mobile Applications
The internet opened up online trading and enabled it to reach the ordinary man on the street. But the mobile phone technology did not stop here. Today with the help of mobile apps it is possible to have the online trading world virtually in your palms. Whether it is monitoring one’s accounts, or trading while on the move, there is hardly any doubt that it is useful in more ways than one. It also helps retail traders to view their entire portfolio and helps them to keep informed and updated with the help of alerts all through the day.
The Role Of The Electronic Media
Apart from the internet and the mobile telephony, the electronic media is also playing its role in keeping customers informed at all points of time. Traders today are in a position to operate independent of the brokers. Bloomberg, CNBC and other such cable news channels keep updating the retail traders almost on a minute-by-minute basis. On the other hand there are sites like Forbes.com and also the various social media sites like Facebook, Twitter which help individual traders to take informed decision without having to depend on the support from brokers. The time delays which are associated with conventional modes of information are no longer a hindrance for small retail traders.
The arrival of algorithmic trading is also something which is giving a new meaning and definition to trading profitably and using science and technology to further this cause. There are many traders who seemingly have benefitted from such computer algorithms and software based solutions. Though for the conventional and old-fashioned traders this might be all confusing and beyond comprehension, there is no doubt that such online tools are becoming quite popular and a day may not be far off when they become indispensable.