Trading Up: The Shocking Evolution Of Data Analytics In Online Trading

Data analytics is playing a major role in online trading in 2020. Here's what to know.
data analytics in online trading
Shutterstock Licensed Photo - By Elnur | stock photo ID: 592866884

Data analytics technology is becoming more integral to the future of most industries. The online trading industry is one of the sectors where data analytics will be particularly important.

Advances in analytics technology are – in part at least – behind some of the biggest leaps forward in business and commerce. Trading the global markets is no different. In recent years, we have seen an evolution in platforms and solutions that have made trading quicker, simpler and much more accessible than ever before. And that evolution is perhaps still only in its early stages, as we have not even begun to see the transformation that data analytics will have on the sector.

The effect of this evolution so far, however, is clear. To look at the global currency market, the average daily trading volume scaled new highs in 2019, according to figures from the Bank for International Settlements. With this greater integration of technology, investors are benefiting from larger volumes of data, dynamic pricing and instant communication. Is it just the start?

Mobile tech driving current trading trends 123

Out of the trading pits and now on-the-go, digital connectivity has been important ingredient in the evolution of trading platforms. This paved the way for greater utilization of data analytics in other forms. In the first instance, it opens up investors to a much greater depth of information on specific instruments and how to make the most of their potential. More importantly, however, it means that traders don’t have to be in one specific location. They can use analytics tools to not only better assess trading opportunities, but also execute trades more reliably and quickly.

Digital connectivity is the catalyst. Mobile technology, however, is a game-changer. When you can download a platform such as MetaTrader4 to a smartphone or tablet and take it wherever you go, it changes the rules of engagement. It attracts a new type of retail trader, adding yet more depth to a market that can encourage liquidity and – in some cases – volatility too.

The need for speed

Speed is clearly a key concern for the traders who use online trading platforms. It can have a big difference in the returns achieved. As broadband and mobile internet speeds get faster, it enables trades to be completed in real-time and with split-second accuracy. Mobile platforms also deliver data and charts that only fixed connections were previously capable of.

Now, attention is turning to 5G connectivity and whether its much-lauded uplift in speeds will step the evolution of trading platforms up a gear. Much of what makes a good outcome when trading the markets is speed. The promise of quicker connectivity and the greater processing power of leading smartphones and tablets will only encourage yet more traders to go mobile.

Artificial intelligence

The advent of 5G connectivity is now upon us – but what about artificial intelligence (AI) and machine learning? While the evolution and transformation of online platforms in recent years has been dramatic enough already, AI – like in other sectors – offers so much potential. It is already being explored, with Nikkei using it to predict trends in the USD-JPY exchange rate.

What could this mean for traders, then? Well, using AI and machine learning could speed up trades even more as processors work through sizeable amounts of information. It could also look at past events for previous patterns in target markets. And, with these two sets of data, traders can build strategies and adapt portfolios to match all appetites for risk. 

We’ve seen what can be achieved in such a short space of time. Now, for what comes next.

Data Analytics is Changing the Future of Online Trading

The online trading industry is evolving, due to new breakthroughs in data analytics. New analytics technology will be even more important in the coming months, as more traders embrace this digital renaissance.