Over the years, there has been a gradual advancement of technology and has impacted various business models. Share trading is one of the business models that have been impacted by the development of technology. Since there is easy access to technology, the financial market has been transformed. However, there are also concerns about technology’s effects on share markets.
How technology influences trading
A report by U.S. Securities and Exchange Commission highlights the influence of technology on the financial markets. Many changes have been witnessed, a majority being positive.
Before the advancement of technology, investors had to conduct trades via a bank or directly through a security exchange. This hasn’t changed but it is now possible to do all that conveniently using digital forms of trading. You can execute trades on your PC or mobile device remotely without the need to contact your brokers.
Use of apps
The buying and selling of shares have also been simplified by the use of apps. Most brokerage firms have developed mobile applications that can be used by traders. This development has made it possible for a significant reduction in fees. In turn, it is making the stock market more accessible to many investors.
Real-time monitoring of activities
Traders can also monitor their trades live when they need to. Most share trading platforms provide their clients with real-time monitoring access. They do not have to wait for results or keep an active communication channel with a broker to know their investment development.
Benefits to traders
These latest developments give investors many benefits.
An investor in share markets can now access the internet and research before executing a trade. This benefit presents a unique scenario where traders come out as more informed to trade. Researching financial market news before buying or selling gives investors an edge to make better decisions. It might not guarantee instant profits but at least the investor stays informed.
Technology allows financial investors to trade as frequently as they want. It is now possible to buy shares and sell them on the same day. The cycle of buying and selling stocks has been simplified and given to what is called “day trading.”
Convenience is one of the top benefits that technology brings. The additional apps and remote transactions make it possible for an investor to trade anywhere.
It is a fact that technology has improved share trading. But it also presents some risks, which can be managed.
The greatest challenge is cyber theft, which is a global concern. The rise of technology has introduced many remote share brokerage firms. Without due diligence, the investor can lose their money when operating on unlicensed platforms. Also, the ease of making traders from various platforms can cause a risk of overtrading. It’s important to learn about the financial markets and how to use tools like stop loss, to avoid losing money fast.
Still, the benefits of technology in share markets are arguably greater than the risks, thus presenting a conclusive approach that there is a positive impact of technology.