Tech and Trading
Trading stocks and forex is hardly a new pastime or career: the first stock exchange was constructed in 1611 in Amsterdam by the Dutch East India Company. Forex trading is a slightly more recent addition to the trading family: the forex market officially opened in 1973. Trading of any kind used to be a very different industry than what it is today: you would have to appear at the exchange and haggle for your stocks physically.
Forex, a child born at the very beginning of the computer age, started with telephone trading and swiftly moved over to computer trading, though the internet would not follow for some years. As technology advanced, it made trading stocks and forex so much simpler, so simple, in fact, that to trade forex, you don’t even have to leave your home. There were times when you’d have to wait for news of the day’s figures by telephone or messenger, but that time is long gone. The incredible advancements in technology that we’ve seen over the last fifty years have made it possible to trade at high speed and in real-time; let’s take a look at some of the details.
How Tech Has Influenced Forex Trading
In the early days of forex trading, the business was a lot slower than it is today. We have the internet to thank for the fact that we can now trade forex in real-time: market numbers are constantly updated by reputable trading platforms and on business pages featured on sites like CNN or Forbes. This minimizes the amount of time that a trader “wastes” waiting for information to come in and makes the best use possible of that trader’s time in a productive way. Fiber optic cables send data around the world at light speed, meaning that changes are received almost the second that they are made. Time is money in the world of trading, so every little bit is precious.
Real-time access to data about world events is also an essential component in modern forex trading: world economic and political events have a huge influence on the value of a currency, so the faster traders have access to information about these events, the faster they can adjust their strategies where necessary.
As we mentioned earlier, trading of all kinds used to be a lot harder to get to. If you lived in a remote area and had an interest in trading forex, there was almost no chance at all that you could ever have taken part without relocating to a big city where you’d have had access to computer monitors and, before that, a reliable phone connection. Even if you did have access, you would likely have needed to be part of a large corporation because most forex trades took place between corporations and banks rather than individuals. When the internet became a common household addition in the early 2000s, all of that changed. Wherever you live, as long as you have a secure and stable internet connection, you have access to information about forex and have the ability to trade. You could be lying on a beach in the Caribbean with a tablet; as long as you have internet, you have access.
Increase in Broker Standards
New and speedy technology means that brokers can do their job in a much more efficient way. Innovative companies are always coming up with new and better trading platforms or improved ways of charting, understanding, and “predicting” what the market might do next. These days, brokers have to be using the best and most recent technology available on the market, or they’ll lose their clients to someone who does. This increase in technology has also increased competition which any business manager will tell you is a positive in any industry because competition creates excellence.
You don’t have to be sitting in front of your screen to be trading: technology now allows traders and brokers to automate settings. Programs are so sophisticated these days that even rookie traders with only a basic knowledge of the industry are able to use them. Use your time to conduct research on the market instead of hovering over your screen 24/7. As we said before, time is money, and if you aren’t using your time productively, you’re wasting it and the money you could be bringing in. Work smart, not hard!
Technology has impacted the world of forex trading in many ways, almost all of them positive! Just imagine where we’d be without it.