Published on October 24th, 2017 | by Sunit Nandi

Online Trading: Understanding the Technological Foundations

Online traders can leverage more of a technological edge than ever before. In fact, many do not appreciate the challenges that had to be overcome in order to enjoy so many advantages over their predecessors. Whether referring to CFD trading, stocks, the Forex markets or spread bets, there is no doubt that the opportunity to enjoy a side income has never been more realistic. It is therefore important to appreciate the basic “building blocks” behind these innovations.

High-Speed and 4G Internet

There is no doubt that single most influential advancement revolves around the use of high-speed Internet as well as the ability for mobile devices to access 4G connections. This level of communication plays a critical role, for access to real-time information is essential to capitalise upon specific movements. As of the time that this article was written, a total of 87 countries in the world now provide their residents with 4G access (1). This number is expected to increase as the associated technology becomes more prevalent.

The Mobile-Responsive Website

There are currently more than 46.4 million smartphone users throughout the United Kingdom alone. This figure is expected to reach at least 53.96 million by the year 2022 (2). Online trading portals have had to adapt to this changing demographic as more and more users now access websites through mobile devices. However, this is not without its fair share of challenges. Websites need to be properly coded so that they will display the same on a smartphone or tablet as they would on a standard desktop computer. Those which have not yet leveraged the mobile edge are destined to fall behind their competitors. This is the very same reason why larger investment portals including CMC Markets have developed applications for both Android and iOS systems.

Trading Bots

Most modern websites provide users with what is commonly referred to as algorithmic trading systems. These are known as trading “bots” in some circles. However, they are not robots in the physical sense. Investment algorithms are advanced mathematical formulae which have been designed to perform certain actions at designated times (3). Some examples include:

Selling when an asset rises to a specific price.
Buying when a support level is reached.
Alerting traders to specific movements.

The ultimate goal of any investment bot is to make life easier when accessing a website. They can also provide invaluable insight to novices and as time progresses, such algorithms are likely to become even more useful.

The Intuitive GUI

GUI is an acronym for graphical user interface. The success of any trading website is partially based upon how easy clients can navigate from page to page. When seconds can sometimes matter, the GUI is extremely important. Developers must take into account page load times, navigation menus, multiple languages, methods of customer support and how clearly a chart will be displayed on a mobile device. As you may imagine, these metrics can be challenging to address and they take time to implement. It is nonetheless a fact that traders who are looking for lightning-fast interactions are satisfied with nothing less than the very best. Therefore, the GUI is another fundamental cornerstone of the modern investment portal.

From CFD trading to monitoring the spot price of gold, technology will ultimately determine profitability. It should now be clear that there is much more that meets the eye than a handful of charts and prices alone. The wizards behind the proverbial curtain are developers who are able to keep abreast of changes as they arise.

Sources:

https://qz.com/915726/the-countries-with-the-worlds-fastest-mobile-internet/
https://www.statista.com/statistics/553464/predicted-number-of-smartphone-users-in-the-united-kingdom-uk/
https://www.mathworks.com/discovery/algorithmic-trading.html

Tags: foundations, online, technological, trading, understanding

About the Author

Sunit Nandi I'm the leader of Techno FAQ. Also an engineering college student with immense interest in science and technology. Other interests include literature, coin collecting, gardening and photography. Always wish to live life like there's no tomorrow.