Of all financial markets, the forex market is the biggest, crossing daily transactions of more than $7 trillion. And the size is getting larger each year. In addition to that, we see new traders exploring the forex market for more opportunities. How is that possible? What has made this possible?
The answer is ‘Technology’. Like in other fields, technology has significantly changed the forex market, opening doors to many participants – financial institutions, governments, banks, corporations, etc.
Lastly, they have welcomed retail traders with open arms, who have more trading power in their hands than ever. Here are the five ways technology has transferred to the forex market.
More Accessible
If it hadn’t been for technology, the forex market would not be as big as it is today. Earlier, only the big banks and financial institutions traded forex. It was only a dream for individual traders!
However, technology changed this outlook, bringing the trading world into the traders’ homes. You immediately sign up with a forex broker, open a trading account, and start trading.
Even while trading in the market, technology can help mitigate the risks by providing you with different values like lot size, margin, leverage, pip and profit in the currency of your choice. This has been made possible with the help of trading tools. Let’s take the margin calculator as an example, this tool can let you know the margin you should use based on your trading capital. So, if you are doing leveraged trading, then knowing the right margin amount will be quite useful to you in terms of managing your risk. Other trading calculators work similarly, and together, they give traders a clearer picture of their trades.
Rise of Online Platforms
Trading in the decentralised forex market was not easy in the early days. It was way more complex due to the limitations in technology and the lack of transparency.
However, with online forex brokers and advanced trading platforms, the trading process has become easier than ever, and you can open and trade on your own. By choosing a reliable broker, you get solid trading conditions, and by picking a technology-driven platform, you can ensure a seamless trading experience.
These trading platforms provide you with the necessary resources to do trading: trading tools, indicators, customer support, etc. Some of the top trading platforms these forex brokers offer are MT4 and MT5.
Both are offered by MetaTrader, a parent company that developed them. However, most brokers provide them today because they offer the best trading features.
Although traders prefer MT4 for forex trading, you can explore other markets on MT4 and MT5, which offer high-end, advanced trading features. Besides providing quality trading platforms, forex brokers get the credit of making trading affordable to traders on a small budget.
The minimum deposit requirement to open a forex trading account is low, and brokers offer a range of options for trading: account types, spreads, commissions, leverage, etc.
If you cannot decide which one to take, you can always test a demo trading account offered by the Forex brokers and see whether it would be fitting to trade with them.
Easy Access to Information
There was a time when kicking off with trading was suited only to people with access to resources and higher savings. Much of that has changed as technology has made the market more accessible to all.
Today, anyone can access the right resources and knowledge to become a forex trader. The best thing?
All of this is free, though there are great courses you can sign up for. They can be pricey, though, so not everyone can afford them. Anyhow, you can still learn trading on your own if you have the zeal for it.
Online forex communities have contributed to this by making quality knowledge accessible and building a community presence that nurtures and pushes everyone toward the same goal.
Forex trading forums, such as Babypips and Myfxbook, are examples. Users can join these communities for free, interact with traders, and join structured trading lessons curated by professional forex traders.
A plethora of information is available on YouTube and social media platforms. Professional traders are open to sharing their experiences; you can even freely copy their strategies, give them a test, and incorporate them into your trading system.
Brokers are stepping forward so that quality information reaches traders. From webinars to courses, they develop trading resources, offering a hand in becoming a successful trader.
However, there is no shortage of poor trading information, as everyone is bombarded with knowledge. There is more cheating, fraud, and confusion. Which resource should you follow? This is why, before you jump into trading, learn to filter your resources. Pick those that are easy to follow and are reliable, presenting genuine information.
Trade on the Go
The newest trend in trading is that of mobile trading. You don’t have to sit for hours, breaking your neck, waiting for the right trading opportunity to come to your door.
With mobile trading, not only can you keep track of your trades, but you can also get notifications of the latest happenings in the market. This feature is helpful for those traders who are new to the market or are busy with their full-time jobs.
Automated Trading
Automated trading is another new development in the forex market. Executing trading strategies can be complex because of the pressure and time constraints.
But with automated forex trading, you can develop well-tested trading strategies and implement them on a live trading account. This will reduce your pressure, as automated trading can do the heavy lifting. Moreover, you can put them to use for 24 hours, saving you time for other essential tasks. You can think of the profit number you wish to earn on a trading day, and based on that, you can provide input to the trading bot. Once that profit amount is reached, you can call it a day. To calculate the tentative profit figure, you can use a profit calculator, which is highly accurate and tells you the possible outcome of the trade and that, too, in the base currency of your trading account.
Final Thoughts
The fact that anyone can quickly get into trading today is a big revolution, as before, it was a luxury that only some privileged could afford back then. Technology has made significant strides in the forex market, thinning the gap between aspiring forex traders and the market.
You have plenty of brokerage options to choose from, and you can even explore multiple trading markets and opportunities with them.
If you are serious about trading, you should embrace these advancements and stay updated with the newer ones. So you can trade more seamlessly.
