At a recent conference I attended for IT and computer science professionals, the keynote speaker talked extensively about the impact that advances in software development have had on the economy. The materialization of new software applications has opened the door for countless new employment opportunities. They have also disrupted existing careers by giving new opportunities to participants with less capital.
Foreign currency exchange trading is one of the careers that has benefited from new breakthroughs in software technology. The market for foreign currency trading is $5.1 trillion. This dwarfs all other financial markets in the world. It is nearly 60 times as large as the global market for stocks and private equity combined.
While there have always been money making opportunities for currency traders, they have historically been primarily reserved for major institutional investors. Individual traders often struggled. Fortunately, new Forex software has helped level the playing field.
How do new software developments improve the outlook for foreign currency traders?
A few years ago, Alanna Petroff talked about the opportunities for Forex traders on CNN Money. She pointed out that there were a lot of things that currency traders could do to thrive in the Forex market. A lot of her advice boiled down to forming useful networking connections and understanding the basic mechanics of the market.
Unfortunately, Forex trading is a bit trickier than her Op-ed would like you to believe. The good news is that new software offers invaluable opportunities to make more profitable trades and execute a viable long-term strategy. Some of these benefits are listed below.
Using Forex software can help execute trades more quickly
Timeliness is incredibly important for any Forex trader. Market movements can unfold in a matter of minutes. If you have a fairly solid trading opportunity, you might realize a trade based on price movements that will take place within the next 48 to 72 hours. You might not think that a 30 minute or two-hour delay will necessarily make a big difference in these situations.
However, you would be incorrect to make that assumption. You need to consider the fact that the majority of trades that you place will not be profitable. Your success as a Forex trader doesn’t hinge on your ability to be right most of the time. Rather, you need to make as much money as possible from the trades that are profitable.
If you are slow when making a Forex trade, your profitability might be lower. As a result, you might have a harder time building enough of a cash reserve from your profitable trades to offset your losses.
This is where Forex trading software can become so useful. You can make trades a lot more quickly, so you can realize the highest possible profit.
Machine learning software can forecast critical trends that influence the direction of the market
You need to be a proficient trend forecaster to make money trading Forex. This can be difficult, because there are so many different factors that influence the prices of different currency pairs. This could actually be a blessing in disguise, because this makes the market less efficient. Therefore, there are more opportunities to outperform other traders or even institutional investors with existing knowledge about the markets.
Nevertheless, forecasting these trends is not easy. You will need a highly sophisticated deep learning application to project long-term trends. A number of new Forex trend forecasting applications are on the market, which can make this job a lot easier.
Facilitate communication between other traders
Forex trading might seem like a solitary profession. However, it is prudent to build and nurture relationships with other traders. Keep in mind that nature institutional investors have extensive resources on hand. You will have an easier time placing profitable trades if you collaborate with other traders.
New software products have made this a lot easier. You can use various Forex applications to keep in touch with other traders and share tips and strategies.
Software makes foreign currency trading more lucrative
You need all the resources at your disposal to thrive as a foreign currency trader. The good news is that there is a lot of new software applications on the market. You should take advantage of them to have the highest probability of succeeding in this profession.