How Technology Has Radically Changed the Way We Trade and Invest

by Devin Morrissey, Guest Contributor

Technology has advanced most areas of life including how we trade stocks or monitor our investments. Old school trading was only accessible via the floor and calling live brokers to make deals for you. Now, you can go online at any time of day or night and broker trades yourself.

Thanks to crowdfunding, traders can now trade within a vacuum, swapping funds with each other seamlessly. Apps and the internet also employ the use of robots to automate trades based on specific criteria you set up. Through this technology, your stocks and investments are monitored and tended to while you sleep.

The market is also heavily saturated with analysis software to help you make better trades and investments. These programs include price charts that you can customize to test variables and possible growth scenarios. Often, you can set up automation and purchase shares directly through the software.

Technology has opened trading up to the average person and made it more accessible and easier than ever.

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The internet has had a dramatic effect on the world. Subjects that were complicated and inaccessible to the average Joe are now littered across the web for anyone to read, digest and use. Trading and investments are made easy through access to tutorials, advice and instant data. You can even have financial advisors send out weekly trading advice emails right to your inbox.

For example, this article on Tradingsim teaches the novice buyer to monitor trading only during the first and last hours. They lay out in plain terms why the first 5 minutes of the trading day set the stage for the remainder. It goes on to explain how trending works in stocks and why. The article gets very detailed, and anyone wanting to learn how to jump into day trading would benefit greatly from reading it.

In the good old days, we all had these Encyclopedia Britannica in our homes for when we needed to learn about something new. Thanks to the humble beginnings of ARPANET, and the idea of shared information, we now have access to trillions of pieces of information at our fingertips. Complex topics like day trading and investment advice are only a click away. Access to actionable advice opens up the door to a new generation of investors.

Leveling the Playing Field Through Competition
Access to technology not only informs a beginner about trading, it also gives the veteran investor an advantage by shopping around for the best brokerage firm with the lowest transaction fees. In effect, technology has leveled the playing field and created more diversity in the offerings and forced brokers to be more competitive.

Firms that have kept their finger on the pulse of technology offer clients a customized app to monitor their holdings and make trades on the fly. The world moves quickly, and technology gives both investors and firms the ammunition to react swiftly and efficiently to radical changes in the market.

The technological push that created more competition and lowered fees is good for everyone. It has helped infuse the market with alternative players that would never before have been able to invest.

Apps and Machine Learning
Unlike the past when investing was only available to the wealthy, regular Americans are diving in and trying their hand at stock trading. One of the reasons for this is the advent of robo-advisors. Financial firms have developed sophisticated algorithms that help investors diversify an entire portfolio. These robo-advisors are better at predicting wins than humans.

There is a mobile app for everything and investing is no different. Educational apps are teaching novices to become experts quickly. Other apps allow users to monitor their holdings in real-time and make trades with a few touches of the screen. Many allow you to buy and sell without paying any commissions.

Apps give the public the ability to monitor their investments 24/7, which provides them with peace of mind. Being able to check on things from anywhere is empowering. These same apps also help predict trends and monitor progress, making future purchases more comfortable. Technology keeps finding new ways to encourage further growth in financial markets and investing.

Not Your Average Investment Strategy
Not every investor strategizes the same way. Some play hard and fast with their money, and others keep things close to the vest. Although experts frown upon using credit to fund investments, you can do it. Technology has paved the way to make short-term investments through unconventional means.

If you have done your homework and feel confident about using credit to invest in stocks, you can at least use technology to check them frequently and sell as quickly as you need to. If you do put up credit as collateral, at least you can monitor those accounts and see any updates, so you know when you need to pay to avoid fees and interest.

Just be careful when funding your stock trades with borrowed money or debit cards. Sometimes you end up owing way more than the stock was ever worth. Using liquid options like your savings is a much better bet.

Additional Ways Technology Has Impacted Investing
The internet combined with government broadband initiatives have opened up investing, and online trading to people in rural areas who never before had this opportunity. Younger investors grew up steeped in technology, so investing through mobile apps is second nature to them.

Financial technology offers safer ways for conservatives to invest, such as payment options that invest a particular amount into a money market every time they make a purchase. Cryptocurrency or virtual money offers another interesting investment option that has the potential for big returns and exists only online.

There is no question that technology has radically altered the landscape of investing. High-tech advances have leveled the playing field with brokers, made stocks easy to understand, less expensive to trade and perfectly accessible to the average person. You no longer have to be a financial wizard or a wealthy magnet to invest. Technology has put trading at your fingertips.

Author bio:

Devin prides himself on being a jack of all trades; his career trajectory is more a zigzag than an obvious trend, just the way he likes it. He pops up across the Pacific Northwest, though never in one place for long. You can follow him more reliably on Twitter. ​