The Evolution of Online Trading Technology: How it has Changed the Financial Markets

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Financial trading has historically been conducted through telecommunication, electronic networks and third party brokers, as interested parties from across the globe have invested their money in a range of stocks and derivative products. While the international nature of the financial markets remains unchanged, however, the methods used to execute trades and manage portfolios have evolved beyond all recognition.

The current market is on the verge of an even greater and more controversial development, however, with automated and high frequency trading becoming increasingly popular among investors. Criticized as being vulnerable to manipulation and derided as the potential triggers for financial market instability, there are many who claim that the creation of automated trading techniques has taken technological advancement beyond its comfort zone.

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This controversy aside, however, the development of online trading technology has been largely positive for the financial markets. With this in mind, it is worth addressing its advancement and the key benefits that it has delivered to international traders and investors. Consider the following: –

  • The Integration of Online Server Technology: When the concept of online trading technology first entered the public domain, its key selling point was its capacity to provide users with instant access to the financial markets. This is thanks to the application of wider, online server technology, which allows multiple individuals to operate within a single space without minimizing their productivity. The integration of this technology removed one of the major barriers to entry for aspiring traders, as instant access to the financial markets was once exclusive to financial experts and large corporations.
  • The Development of Mobile Technology: While having the capacity to access the financial markets remotely has benefited traders immensely, it is the development of mobile applications that has truly revolutionized modern investment methods. Significant advancements in online trading for the Android and iPhone have enabled investors to operate effectively while on the move, regardless of their precise geographic location or circumstances. This has ensured that modern day traders can execute orders in real time, while striving to maximize the profitability of each transaction that they undertake.
  • The Delivery of Highly Evolved Analytical Tools and Indicators: In days gone by, the main issue facing independent and part time traders was a lack of access to financial and intellectual resources. Both problems have been partially resolved by online trading technology, as increasingly sophisticated platforms continue to eliminate barriers to entry and reduce the gap between individual traders and financial institutions. As a result, prominent examples of software such as the MetaTrader 5 are now available to all aspiring traders, and deliver a comprehensive range of technical indicators and advanced analytical tools.

While the supposed threat of high frequency trading is a keen talking point for financial institutions throughout the world, its suspect nature should not detract from the positive impact that online trading technology has had on the financial markets. From the application of online server technology to the development of advanced mobile trading platforms, investors in the 21st century have benefited hugely from innovation and the increasing accessibility of advanced market tools.