The barrier to starting a trading journey has been lowered considerably over the past few years. Since the financial industry was shaken up in 2008, there has been a push to do things differently and embrace the modern age while also opening doors for those who might want to enter the arena. So, what are some of the recent trends that are shaking up the online trading industry?
Social Online Trading Platforms
Trading was once a very secretive and solitary industry, but 2019 saw a rise in social trading platforms. These allow traders to share input and information with one another. This is another example of the barrier to the industry being lowered, as this information used to only available to those who could afford it or had the time to find it.
Now, with sharing platforms urging traders to pass on information and allow others to copy their strategy, more people are able to get into the industry. The greater the number of people who are involved in trading, the better the industry will fare. In fact, younger, more tech-savvy traders are more likely to trust the word-of-mouth credibility that comes with social trading.
Regulation vs Leverages
Retail investors are expected to gain more protection when it comes to trading due to regulation in the industry being tightened. The sector is known for its excessive leverage, which could lead to risk for individual traders and the system itself.
The ESMA (European Securities and Markets Authority) has suggested a leverage cap for retail forex trading. The cap would limit the leverage to 30x for the major currency pairs and 20x for non-major pairs, with commodities being faced with even lower limits. Ensuring the industry works for everyone for as long as possible is a key aspect of trading, which is why regulation is important – but this can have an impact on how some people conduct their trades.
Online Trading Academies
In another bid to lower the barrier for entry to the industry, there are even courses that you can take in order to get to know forex and other instruments better. Online trading academies specialise in training and education on forex, stocks, futures, and options to allow you to be a better trader.
The benefits of such academies mean that you can quickly learn what many take a lot longer to learn, while ensuring you don’t have to make any costly mistakes. However, online trading academies could set you back financially anyway as many tend to be fairly expensive.
There are a plethora of free resources attached to reputable trading academies and online trading providers, though, which can be a stop-gap knowledge filler for those who take well to learning on their own. When it comes to paid resources, you could look at balancing the cost of the trading academies with the cost of learning more about trading through trial and error.
As more and more people are getting into trading, the industry itself is being more welcoming and understanding of the trepidation they might face when embarking on a trading journey. Trade protection helps you learn the ropes by protecting your positions and preventing any money being lost during a defined period.
This can be good for beginners or for those who are still navigating the complex world of trading. Zero risk trading is possible on certain trading platforms and sees you reimbursed for positions that go south during a set period. This is one of the main reasons some might not want to try their hand at financial trading, so it could be a huge coup for those who are tempted and feel reassured.
The changing world of trading is evidently upon us and more people are able to get involved, which makes the industry more liquid and more competitive. Not only are trading academies allowing people to officially learn the ropes of trading, but trade protection helps ensure that any losses in the early stages are mitigated. This means that people will be more likely to embark on a trading journey. Moreover, stronger regulation helps prevent a loss of money, while social trading platforms help people learn from others and pass on their knowledge. All of these factors have contributed to changing how trading looks and feels and allowing those not yet in the game to get into it.