How Does the Rise of FinTech Influence Trading?
Even those who have no connection to the banking business are impacted by fintech since it has had such a significant influence on our daily lives. As the years went by, it became clear that FinTech is a new movement that has the potential to alter how we engage with financial services, not just a phrase or passing fad.
However, FinTech isn’t just about banking and loans, despite what the public perception is. FinTech, one of the most developing industries, keeps growing and influencing adjacent industries, including trading. Everyone has seen first-hand the destabilizing force of FinTech and found numerous profitable chances as a result of it, from seasoned traders with years of expertise to newbies who try it out because they’ve read fantastic things about it online.
How the FinTech revolution made trading accessible to everyone
The spread of financial products among novice consumers was one of the largest developments brought about by fintech. People no longer had to physically visit their local bank branches in order to obtain information about their accounts, send money to others, create savings accounts, or receive individualized financing solutions, for instance, which made the transformation in the banking industry quite apparent. All of this is now possible from the convenience of your home, through the use of a banking app, or by utilizing FinTech businesses.
Trading has seen a similar situation, and things will keep evolving. Trading, whether it be in stocks or forex, used to be something that only professionals did. Outsiders were unable to enter the trading industry since both the necessary knowledge and the platforms themselves were unavailable to anyone without years of investment expertise or employment in the banking industry.
People couldn’t get real-time market data without high-speed Internet, and TV news was insufficient to provide a comprehensive trading environment. It’s difficult to imagine a world without Forex for the generation of digital natives who have grown up with smartphones and fast payments, yet decades of the invention were required for this to happen.
FinTech altered everything. Anyone may now trade online by creating an account on specialized sites. More and more people have access to forex in particular. Nearly anybody around the globe may seek trading methods, discover a suitable broker, select a reputable PAMM account manager, establish practice accounts to practice, or join social trading networks to learn from other traders.
In addition to these sites, there are countless blogs that examine the international news that affects currencies and instructional platforms that provide in-depth explanations of trading. Social media, of course, has a part to play in the exchange of information quickly and in the networking of traders.
The daily FX volume increased dramatically to a staggering $6.6 trillion, according to the most recent figures, and it will continue to rise as more people become aware of this issue.
A colossal contribution to the topic of popularizing trading was made by MetaTrader – a trading platform considered the industry standard for Forex and CFD trading applications today. In 2020, MT4 and MT5 account for nearly 79% of the trading software market, according to Finance Magnates’ analytics department.
Recently, mobile versions of MetaTrader IOS were banned by Apple, and retail online traders have begun to pay more attention to MetaTrader alternative instruments. TradingView, one of the most popular charting platforms in the world, is perhaps the most viable alternative in the case of the MT4 and MT5 ban, as long as you can connect it to your trading account, for example on Capital.com.
The adaptable nature of robo-advisors
The best traders are those who are well-informed about their financial situation, are aware of how the economy affects asset prices, have a strong risk management strategy and know where to invest their money.
Traders now have access to robo-advisors, due to FinTech, which are specialized online services that employ AI to comprehend the aims of the trader and offer automatic trading advice in a user-friendly interface.
Even if they are less expensive, robo-advisors can complete complex activities like picking assets, tax-loss harvesting, or creating customized investment portfolios without the aid of a human. Without needing to enroll in a school, even novice traders may begin trading responsibly and advance their education in this way.
For comparison, traditional (human) advisers often only deal with customers who have at least $100,000 in assets, charge up to 2%, and are not always accessible.
Cryptocurrency and trading
The cryptocurrency market may not be expanding as rapidly as anticipated, but it has grown to the point where investors may now utilize their resources for trading as well. Users have the ability to fund their wallets with bitcoin even when it is not able to trade with cryptocurrency the same way they would with traditional currency pairings thanks to brokers who are gradually allowing this.
For traders, fintech has opened up new worlds. Technology has made it possible for anyone to carry out transactions and manage trading accounts just as effortlessly as they can send money, and the greatest thing is that they don’t need to rely on a financial institution to do it. This gives traders the potential to create effective strategies depending on their objectives, especially when combined with the ubiquitous accessibility of real-time information.