How Financial Apps Has Changed Online Trading

The days when the investment game belonged exclusively to the privileged ones are long gone, as well as having to use expensive bank-run brokerage firms to gain access to any markets. It’s a whole new era for the average person who wants to generate passive income or work smart with their money. And the biggest thanks for that change goes to the trading apps.

Trading apps have made a big splash these last couple of years, especially during the pandemic. But, it's not entirely without incident, like the whole Robinhood controversy fueled by the Reddit GameStop stock rise. So with all this new accessibility, let's take a closer look at financial apps.

Positive Aspects of Online Trading

There are a lot of positive highlights to online trading! Here are some of them:

Taking Control

Part of this new accessibility is the ability for people to take full control over their financial decisions. Apps like IG Trading and CMC Markets provide users with access to both local and foreign stocks, ETFs, and commodities. They also provide the power to amend orders, use conditional orders, and set alerts and signals. Some trading apps even give people access to certain cryptocurrencies to broaden their portfolios.

Lower Fees

Traditional brokers are extremely costly, and there’s no guarantee that they’re managing funds with people’s best interests at heart. Most trading apps are pretty cheap, and some even come with $0 in brokerage fees for certain trades.

Be on the lookout for any hidden funds. Respectable trading apps list all their fees upfront, but be sure to know how and when these fees are charged. Someone who plans to be an active trader, for example, won’t mind inactivity or monthly fees but would hate high transaction fees.

Free Information

Most high-end trading apps provide a host of useful information on stocks and trading. Some also provide daily news updates on investments, companies, and financial movements. Then there are also trading apps that provide tools for newbies, like demo accounts and helpful training guides.

Negative Aspects of Online Trading

Of course, nothing’s perfect. Let’s look at the downsides to online trading:

New Financial Security Threats

It’s not a big surprise, but since most people trade on their phones, this opens them up to cyber threats. Just like with digital banking, getting access to someone’s trading portfolio is like hitting a goldmine.

So, anyone who uses online trading apps should be extra aware of their personal cybersecurity efforts. Don’t reuse passwords and don’t write them down, be careful when downloading apps or going on websites, and use two-factor authentication. Also, take a look at tools that can increase security, like VPNs. VPNs are popular among Australians to protect their devices from being infiltrated by hackers via their internet connection.

Quick Shift in Trends

With so many people getting access to the trading gig, the landscape of investments is bound to change. Be careful not to give in to the hype when new trends pop up. Because things worked out for the Gamestop people on Reddit doesn’t mean it’s going to happen every time.

Summary

Online share trading has opened up promising avenues for many people, but keep a clear head and be careful of the risks. Remember, smart financial decisions are always backed by research and proper planning!