We could trace the origin of investment back to when brokers had to visit stock exchanges physically to make trades. The dynamics have shifted over the years. Now, we live in an era where anyone, anywhere, can invest in forex or any other assets with a mobile device and stable internet connection. We can easily attribute this development to the changing scenarios in the technological sector and how it constantly influences the financial market. Here are the top technological innovations leading in this conversation and restructuring how investment works in 2023.
Progression in Investment Technology
The use of technology in the financial market isn’t a new phenomenon. Automated trading systems have been around for as long as the 1970s, and traders have been able to access real-time data since the 1990s. The introduction of the Designated Order Turnaround (DOT) in the 1970s marked the beginning of automated trading; this system allowed traders to route their orders to the trading floor and execute their trades manually. Automatic trading changed the game for the everyday trader, and over the years, creators and developers have found ways to make it even better.
There has been a shift in how these systems operate, with new platforms like TradingView providing access to data and more sophisticated algorithms increasing the odds for everyday traders. We are also beginning to see more recent innovations like artificial intelligence, machine learning, blockchain technology, and cryptocurrencies. One of the most exciting benefits of these innovations is that they increase the profit potential for investors and can also be exploited to make better data-driven investment decisions. These additions are considered next-generation technology, which every investor should be on the lookout for in 2023.
Next-Gen Technology in The Financial Market
Artificial Intelligence
Artificial intelligence is changing how investment works in more ways than we can count. For one, Robo-advisors are a famous concept investors can leverage for success. Robo-advisors are digital platforms that provide automated and algorithmic-driven financial assistance. This assistance is mostly through planning and investment services without human touch or supervision. Robo advisors get information from traders by asking questions and using the answers to help them make wise investment decisions. Artificial intelligence is also used in predictive analysis, optimising portfolios, managing trade entry, algorithmic trading, and risk management.
Algorithmic trading is another practical use case of AI in investing. Traders can use these tools to make trades and carry out market analysis. It’s a method of trading using a set of computer programs or instructions that can be executed without the traders. The practicality of algorithmic trading has allowed traders to explore higher horizons in trading. Its advantages include better trade executions, lack of human error, low latency, and back testing.
Technical Analysis
Expert investors have found ways to make the most of technical analysis as an evolving technology in the financial market. Traders in the crypto and forex market use technical analysis to stay ahead of the curve, access relevant market data, and make future predictions profitable. Technical analysis can also be applied in tracking historical data of other securities, stocks, commodities, and futures. Technical Analysis can be used to track the possible performances of these assets, which plays a massive role in the current realities and the future of investment. Popular technical analysis indicators include moving averages, support and resistance levels, relative strength index, and Bollinger bands.
Blockchain Technology
Blockchain technology is one of the newest additions to the financial market, and the crypto market is the most popular investment opportunity of this new technology. The crypto market was valued at about $4.67 billion in 2022 and is anticipated to increase by 12.5% compound annual growth rate (CAGR) by 2030.
Although the market witnessed significant declines over the last year, the crypto space is one of those technological additions making considerable waves in the global financial market. It is a new approach to digital asset investment, and it also comes with many value propositions that set it apart, like decentralisation and transparency.
Another investment blockchain technology introduced is Non-Fungible Tokens (NFTs). NFTs are digital assets that represent ownership of real-world assets. The global NFT market is valued at $7.65 billion today. Blockchain technology is introducing new forms of investments and broadening the horizon for the global financial market. These opportunities are becoming a new trend with massive potential for investors.
New Possibilities for Investing Through Technology
The above list highlights some significant advancements pushing the boundaries in the financial market. There is a new buzz for passive investment, evident through options like cryptocurrencies, automated trading bots, and robo-advisors. The world is starting to take a more hands-off approach to investing, and technology plays a role in this possibility. By staying informed and following these transformations, investors can position themselves to evolve and catch up with mainstream adoptions.
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