The trading world has witnessed a revolutionary turn, from trading on Wall Street floors to trading from the comfort of our bedrooms. The introduction and success of online trading have made the financial markets within the reach of even the common man.
Novices in the online trading space will often find a popular comparison: crypto vs. forex. It is important to note that both digital asset trading forms offer avenues for online trading, however, it is more important to understand the key trends and learn tips to leverage the right tools.
Traditional stock markets became online in the 70s and 80s, and online brokerage sites were utilized extensively by the 90s. With the launch of cryptocurrency, online trading became further legitimate. The brokers are now operational 24/7 and globally.
Factors Driving the Rise of Online Trading
The growth of global online trading is largely influenced by some of these factors:
- Accessibility: Exchange platforms have become largely accessible. Anyone with a smartphone and internet can now access exchanges and make trades. Exchange platforms like Binance have easy onboarding and user experience.
- Decentralized Finance (DeFi): DeFi introduced peer-to-peer trading to the cryptocurrency universe. The new breed of DeFi traders on platforms like Uniswap has flooded the internet trading space.
- Market Volatility: The cryptocurrency market is highly volatile. Its volatility is highly attractive to short-term traders who are in search of quick gains. These traders have also brought about the growing popularity of online trading.
Key Trends in the Online Trading Ecosystem
Some of the trends that have shaped or are shaping the online trading crypto environment are:
- Mobile Trading: Online trading using the mobile phone is so prevalent that online trading is difficult to conceive of without it. Traders can now use mobile apps to monitor charts, develop strategies, execute and monitor their trades, and even track their portfolio performance. These mobile trading platforms also undergo continuous development to ensure they provide the best experience to their users in terms of real-time alert, speed, and security.
- NFT and Tokenized Assets Trading: Alongside token and coin trading, artworks (NFTs) and other world tokenized assets (property and stocks) can now be exchanged on blockchain platforms.
- AI and Bots: Artificial Intelligence (AI) and bots are the latest additions to the online trading community. These computer-based systems can help traders automate their trades, react at lightning speed to changes in the market, and make better choices.
- Copy Trading and Social Trading: Entry of platforms like eToro and BingX with features that help newbies to copy the trades and strategy of experienced traders has revolutionized the space of online trading.
- Compliance and Regulations: More regulatory and compliance issues are springing up in the crypto space. Traders are facing KYC and AML checks by Brokerages due to regulations by the government and financial institutions.
Important Tools for Online Traders
Some of the key tools to succeed in online trading are:
- Reliable and highly liquid crypto exchanges like Binance, Coinbase, Kraken, UniSwap, SushiSwap, and PancakeSwap for decentralized exchanges.
- Quality charting tools like TradingView and Coinigy for live information, drawing tools, and technical analysis.
- Alert and news software like CoinGecko, CoinMarketCap, and Token Metrics to follow market trends, news developments, and token performances.
- Portfolio trackers like CoinStats, FTX, and Zapper to follow portfolio performance.
- Secure wallets like MetaMusk, Trust Wallet, and Hardware Ledger to store assets safely with 2FA.
Popular Tips for Online Trading
- Start with a small capital which you can afford to lose and increase later.
- Don’t trade emotionally; always use tools and data to make decisions.
- Diversify your portfolio by distributing your investment over multiple assets.
- Always have a clear plan and stick to the plan.
- Be careful of scams. Be wary of new links and websites, verify twice token contracts, and never send money to an unknown wallet.
