Many traders have switched to mobile trading apps, or they use them alongside desktop or software trading platforms. This is in line with research that shows that the number of users for these apps is growing by about 40% every year, with many more saying they will use these apps once they start investing. However, their use among those who have embraced them is already reshaping the stock market landscape and how investors approach investing.
Removing the Need for Significant Infrastructure Investments
In the past, traders needed robust infrastructure to follow and trade in the right stocks. These included expensive monitors and fiber optic connections that gave them a speed advantage over the competition. Mobile apps have removed the need for these investments.
They provide similar functionality to what you would get on your desktop or when using trading platform software, eliminating the need for them. Mobile internet speeds have also become so fast that they have mostly caught up to their desktop alternatives.
Additionally, some stock exchanges purposely throttle their data connection to eliminate speed and latency advantages for those with better infrastructure and to eliminate disadvantages for those without it.
Open Up Trading to Everyone
The stock market has seen an increase in the number of investors, traders, and interested parties as mobile apps have removed multiple barriers to entry that previously made it only open to a small group. One of these barriers is access to information. Many people still do not know what investing in stocks is, or the different types of stocks to invest in, and how to maximize their returns.
Now, you can download an app and get all the information you need. This information is curated from experienced traders with vast knowledge and an in-depth understanding of the stock market and stock trading.
The second barrier is high investment amounts. In the past, traders bought and sold shares as whole units. This was a barrier to those who could not afford the high costs, particularly for high-performing and highly attractive companies and industries. With advancements in mobile development and technology, you can simply click ‘download app’ and invest in fractional shares. These are small fragments of single shares that cost a fraction of what common shares do. While they do not give you vast control over a company or industry, they let you start somewhere and grow your investment over time.
Mobile Apps Make Diversification Easier
Stocks present numerous diversification options for traders and investors looking to maximize returns and minimize risks. These options include investing in different industries, funds, or foreign company stocks.
You do not have to turn on your desktop or visit a broker’s website to get access to these opportunities; all you need is a trading app. Most apps even categorize different stock options for you so you can easily find the ones you are interested in.
If you are looking to invest in funds that include a basket of stocks, you can do so easily through a mobile trading app. You get access to different funds and can also see the stocks they contain so you can decide if the fund is right for you.
Access to Analysis Tools
Another significant way mobile apps are changing the market is by providing advanced analysis tools to all traders. In the past, traders had difficulty accessing the data they needed to make informed stock trading decisions. Even when they had access to data, it was often stale which meant it did not produce the desired results.
With the internet, innumerable websites, and numerous databases, traders can access all the data they need to use alongside the analysis tools provided by their mobile trading apps.
Some types of analysis they can do include price, market, sentiment, and trading volume analysis to see which stocks are better to invest in. Beyond this, traders can also run simulations using past data to see if their analysis holds up. Doing this can save them from losing money if their analysis and the strategies borne out of it are wrong.
They Reduce Trading Times
Trades that go through brokers can take some time to be executed. This is because the broker might have other trades they need to execute first. The result can be missing out on a great opportunity, which is true for those who engage in day trading or utilize other short-term stock trading strategies.
You can eliminate the middleman and execute your trades fast with the help of a mobile trading app. If you have fast internet, you might be able to take advantage of price fluctuations and other momentary market shifts that you otherwise might not have been able to if you have to find a computer to execute the profitable trades first.
Any trader who is not yet using a mobile trading app is losing out on the benefits it provides. 24/7 access to analysis tools, real-time data, other traders, and foreign markets regardless of time and location are some of the many reasons traders should use apps, and this is also why they are changing the market as much as they are.
