Over the past decade, Internet-based trading has been spreading like wildfire. The number of people engaged in exchanges of assets online has risen beyond 15 million. These are holders of accounts on different digital platforms. But what is behind this impressive scope? According to the ForexTime company, there are several reasons for the upward trend.
In line with global dynamics, the popularity of Forex trading in South Africa is also on the rise. Residents in Nigeria and other countries on the continent may access the foreign currency exchange , which is the largest and most actively traded of all markets. Today, its daily turnover is estimated to reach a whopping $5 trillion. Generally, online trading has gained traction all over the world.
American Youth Embraces Digital Finance
In 2018, equities.com and other US-based finance media reported on the apparent surge in popularity of digital trading among the younger population. This was especially notable among millennials and Generation Y. The tendency still holds and it does not seem counterintuitive given the extensive spread of smartphones.
Young people today cannot imagine their lives without pervasive technology and they are used to doing many things online. From shopping to education and finance, Internet-connected devices provide vast opportunities in many spheres of life. For instance, while previous generations had to purchase physical shares to profit from the stock market , such need no longer exists.
Digital platforms, like the ones provided by ForexTime , allow users to speculate on price dynamics only and increase their potential returns through leverage.
In the East
Chinese market analysts are noticing similar trends. For example, according to CNBC, the Tiger Brokers app reports a considerable influx of clients under the age of 35. This demographic accounted for over two-thirds of its individual brokers. In 2019, an overwhelming majority of these clients (over 85%) reaped annual profits exceeding $40,000.
Main Reasons for the Surge
So, is Internet addiction the only reason accounting for the rise of virtual trading? According to Western media, the situation is more complex. Here are seven key motivators reported to contribute to the rise.
1. Affordable Deposits
Trading on the old-school stock market would require a sizable initial investment. However, modern CFDs and leverage arrangements allow clients to trade considerable volumes with only a fraction of their own funds.
For instance, the 1:100 leverage on currency exchange means that a $100 deposit opens access to $10,000 trades. In this case, the added funds come from the broker . Some providers offer mini accounts or even cent accounts, where deposits may be as low as $10.
2. Independent Decision-Making
Even though brokerage services are still necessary for entering the global market, traders are free to choose their own strategies. Firms still provide guidance and advice, but the decisions are taken by traders. In addition, the ECN brokerage model means companies are no longer interested in their clients' losses. They have no incentive to fudge the rates for trading, as their commission is paid regardless of the outcome.
3. Easier to Monitor
The advanced technology used by modern brokers allows clients to keep track of their operations at all times and from anywhere. Mobile versions of popular desktop platforms provide full access to trading accounts. Positions may be opened, graphs may be analyzed, and transactions may be initiated regardless of your physical location.
4. Trading Is Faster
Platforms like MetaTrader offer instant execution. While conventional trading schemes may require days or even weeks, a smartphone app will get the job done instantaneously. In the days of yore, you would need to call your broker to conclude a deal.
Now, operations take a few clicks at most. In the modern fast-paced world, speed is of the essence. People are no longer eager to wait. They want to see quick results and take decisions on the spot. brokerage services have evolved in order to facilitate digital trading.
Overall, online trading is only expected to gain more followers. State-of-the-art software packed with sophisticated analysis tools enables clients with little knowledge of finance to gain experience and competence in the volatile world of stocks and currencies.
