Access to modern mobile trading apps is paramount for the majority of traders. Consequently, financial brokers commonly provide their clients with tailor-made and third party trading apps that create convenience. The market is filled with online trading apps in all shapes and sizes. You can find trading apps solely for Forex trading, and crypto trading. There are also various mobile apps for stock trading, and apps for multi-asset trading.
The financial landscape is changing rapidly all the time. It started as a floor trading activity in 18th century New York. In the late 20th century electronic trading platforms emerged that were designed for desktop computers. The transformations were so profound that numerous floor traders found it challenging to adapt and ultimately chose to exit the trader profession. The financial world is radically changing one more time with the advent of new technologies, copy trading, Artificial Intelligence (AI), and mobile trading.
The Rise of Mobile-First Trading
Mobile trading is becoming increasingly popular especially for the younger generations. Not everyone has a computer at home, but almost everyone owns a smartphone. The barriers to trading are also lowering. Many financial brokers offer traders to open accounts from as little as 1 USD. Furthermore, most modern trading platforms do not charge traders with commissions and market data fees. Account opening is simple and fully digital in most cases.
All the factors mentioned above have contributed to increased mobile trading activity. Mobile apps are great for emergency situations, they add practicality and convenience to trading.
Dangers and challenges of mobile trading
While mobile trading softwares offer convenience and flexibility, there are certain reasons to stay away from using them:
- Small screen size: small screen size is the biggest issue when it comes to using mobile apps. Key to success in trading is making well calculated, informed decisions, and the decision making process becomes super difficult when traders are limited by screen size.
- Accidental trades: the touch-based trading apps may lead to accidental trades or input errors. This danger is especially increased for traders that are not accustomed to trading on small screens.
- Danger of emotional trading: while mobile platforms keep traders at arms length from global financial markets and therefore provide huge convenience, this might also be a source of emotional trading for many traders. Traders need to keep in mind that once they open a position, it’s risky to modify that trade, because they are under the influence of an open order. Mobile apps bring the temptation to always be in action to a next level, that can promote emotional, gambling like trading for some individuals.
- Limited functionalities: while most mobile trading platforms are well equipped, they still have limited functionalities compared to desktop based softwares. It’s impossible to conduct market in depth analysis and check bids and ask prices when using a mobile app. Integrating various algorithms on your mobile platform is also highly challenging.
- Challenges related to market monitoring: trading using mobile apps is especially challenging for day traders, as day traders typically create watch lists and wait for perfect trading opportunities. Often, professional day traders keep an eye on 10-15 tradable instruments simultaneously, which requires huge computer monitors.
Key Takeaways
Overall, it’s clear that traders should be cautious when using solely mobile apps. The best way to use mobile trading platforms is to utilize them in conjunction with desktop and web terminals. You can never find a professional trader that conducts technical and fundamental analysis on a mobile. Solely reliance on mobile devices is for amateurs, and unfortunately, amateurs in the financial markets are destined to lose money in the long term, as financial trading is a highly competitive activity.
To sum it all up, mobile trading platforms are increasing in popularity all over the world. There are many benefits that come with mobile trading such as convenience, and access to financial markets from anywhere in the world. Furthermore, mobile apps help traders handle emergency situations such as power outages easily. However, traders should also take into account some of the dangers that come with mobile trading, such as: increased susceptibility of emotional trading, limited screen size could lead to low quality market analysis, and limited functionalities. The best utilization of mobile trading is when mobile apps are used in conjunction with desktop platforms.