When people talk about day trading, they are referring to a practice that remains synonymous with share dealing. It has also evolved over time to include a number of alternative markets, asset classes and derivatives, however, including currency.
In fact, this practice is arguably more suited to liquid markets and derivatives like currency, as it encourages traders to open and close positions during a single, 24-hour window while profiting from short-term price fluctuations.
How Has Technology Made This Practice Easier?
This main benefit of day trading is that it enables investors to capitalise on the financial and macroeconomic trends that impact prices on a daily basis. Because of this, it has enjoyed tremendous popularisation among spread betters, who can speculate on the short-term course that their chosen market will take and achieve gains even in a depreciating sector.
While day trading has commonplace among the Wall Street elite for more than 20 years now, however, it has only recently been embraced by casual investors. This is thanks largely to the spectre of technology, which has eliminated many of the barriers that once surrounded the financial market and made a number of asset classes (and strategies) more accessible.
Day trading offers the best example of this, while the main catalyst for this evolution has been the emergence of online trading platforms. Take ETX Capital, for example, which offers users access to a vast range of assets and marketplaces from a single, customisable interface. Not only this, but tools of this type also allow traders to leverage the last insight, analysis and breaking economic news, which in turn allows them to make informed decisions and make the most of their day trading activities during every 24-hour period.
The Management of Risk When Day Trading
Another key element of technological advancement is that it has made the process of managing risk far easier than it was before. This is because tools such as stop losses can be applied to your account, which ensures that your trades will be terminated once your losses have reached a predetermined level.
This is one of the many ways in which technology has empowered day trading, while ensuring that individuals can operate more profitably and securely over time. In fact, technology is likely to play an even greater role in empowering day traders in the future, with social trading gradually changing the way in which investors choose to develop, refine and apply strategies.