Digital technology has changed the trading game. Of course, it’s not the first time that technology has altered the way people make investments. Early stock exchanges were built on the traditional open outcry system. People would literally take buy and sell orders over the phone and shout them out across the trading floor. All that started to change in the late sixties. Instinet was the first electronic system to revolutionize trading. It allowed institutional clients to bypass the trading floor and deal with each other directly. By the eighties, Bloomberg and Archipelago had joined the party.
The tech revolution continued through the nineties into the noughties when innovations shifted from helping institutions to helping retail clients. Online trading platforms opened up the industry and made major financial markets accessible to the general consumer. The end result was a trading boom. Today, modern platforms not only offer instant access to hundreds of financial instruments, but tutorials, live price charts, data feeds, and expert analysis. Even a relative novice can trade in a similar way to professionals.
Lower Barriers Mean More Investments
One of the remarkable things about the digital trading revolution is that it has lowered the barriers to entry. Retail clients can now begin with demo accounts, and then move onto relatively small investments and gain exposure to major markets. A notable example of this is forex. Today, online forex platforms offer leverage at varying levels. This means a customer can multiply an initial starting stake into an amount that allows them to trade standard forex lots or one of the more recent innovations such as mini lots. Leverage has made forex more accessible to the average trader. Investment companies have used this increase in interest to prop up their bottom-lines which, in turn, facilitates things like leverage.
The digitization of trading has also exposed retail customers to alternative types of investment. Gone are the days when all someone could do was buy shares in X company and wait for them to increase in value. Through the power of modern technology, trading yes or no on binary options online has become popular. However, brokers are aware that some traders may want to first learn the principles of this before jumping in with their money. This is why many platforms now offer a demo account to allow people to practice trading so that they can improve their trading strategy and become better at trading as a whole. This also acts as a good opportunity to get acquainted with your providers trading app as well as learn the markets.
Looking at binary options, it provides greater flexibility for some traders. The proposition is thus: will X increase in value? The investor then has to answer yes or no. That means they can profit if the asset increases in value or decreases in value, depending on the answer they gave.
Digital Technology Breeds Diversity
The advent of binary options for retail customers through platforms such as Nadex™ is due, in part, to increased liquidity. More people are trading and, therefore, companies can afford to offer different options. This idea also applies when you take into account cryptocurrencies and new types of investment options. Cryptos, crowdfunding, and IPOs bring different options to the table; options that often aren’t considered “standard.” These investments are ideal for the adventurous.
If forex suits those who prefer rapidly changing prices, and binary options are perfect for those that want flexibility, cryptos and IPOs are for those with a high-risk appetite. Because new products are often untested, they can be volatile. That means their value could surge, like Bitcoin, or plummet. For some, that’s exciting. However, what’s also important to remember is that modern trading platforms don’t confine you to one thing and there are also demos to try out. So, while there are many different options, the evolution of technology means retail consumers can hold varied portfolios. That’s the greatest contribution has made to trading and, in turn, traders. Moreover, it’s an example of how trading has evolved thanks to modern technology.