technology

The Significance of Technology on the Trading World

As technology grows more sophisticated, so do regular people’s business savvy and investment know-how. Nowadays, a business degree is no longer a precursor to finding success as an entrepreneur or a trader, thanks to tech advancements and how companies are leveraging it to their advantage. If you are a budding trader or someone interested in business trends, it will do you a world of good to keep up with new tech tools that can help you in your endeavors. Here are some ways tech advancements are shaping and changing the trading world.

Blockchain technology

When we think of technology in the 21st century and how it can shape our financial world, the first thing that comes to mind is blockchain technology, also known as a process that was developed to ensure that human beings can’t hack, change, or cheat the system. Think of blockchain as a massive database that collects information on transactions—blockchains are, as the name suggests, a chain of blocks that contain data. Here are some ways blockchain is shaping the world of trading:

  • Trading costs can decrease because blockchain technology, with all its immutable and transparent recording of transactions, can help significantly reduce the costs by leveraging public blockchains.
  • Since one of the appeals of blockchain technology is its transparency, there will be a greater reduction of chances for fraud.
  • Settlement times will also be cut in half and can speed up the process even as quickly as one day or even a few hours.
  • Since the world has different standard times, exchanges also have different hours of operation. Blockchain can pave the way for 24/7 trading across the globe, removing the necessity to wait until a specific market can open up before we can consummate a trade.

These are just some disruptions that blockchain technology can do in the world of trade, and time will tell if any of this will come to pass or if this technology will signal the beginning of the end for more traditional trading.

Real estate

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If you have always been interested in investing in real estate, here are some ways technology is transforming this industry:

  • Because of the COVID-19 crisis, real estate investment agencies have had to find ways to showcase properties while ensuring that buyers remain in the comfort of their homes. Digital open houses became the norm in the past year and a half, with agents exchanging traditional open houses to virtual reality (VR) and augmented reality (VR) experiences. Even before the pandemic hit, VR and AR were tech tools that the world of real estate has already been playing with, but this process was rushed even more after society needed to find ways to curb infections. These tech advancements can range from aerial footage acquired by drones to 3D technology, giving clients and investors the chance to “step into” the property without actually being there. Soon enough, agents may no longer need to spend additional costs on staging—especially since VR and AR are already sufficient alternatives.
  • Artificial intelligence (AI) and all its machine learning capabilities are also helping the real estate industry by assisting in the search for comparable properties, calculating market rents, and finding potentially profitable investment opportunities. AI can also help property owners in estimating the future value of new amenities.

Algorithmic trading

Because trading relies so much on accounting for unpredictable variables such as timing, price, and volume to ensure that the trader is making the right decisions, algorithmic trading can help investors find helpful solutions to problems. This technology leverages complex formulas alongside arithmetic models and human supervision to ensure that investors can reduce costs and have a much swifter execution time. Simply put, algorithmic trading is leveraging rules-based and process-based algorithms as a strategy to execute profitable trades.

Democratizing investments

Another way technological advancements are changing the world of trading is by allowing the average Joe to engage in trades and investments. Because of technology, there are new investment connections and opportunities available to the average American in need of funding. For example, if an aspiring entrepreneur has an excellent startup idea but lacks funding, they can enlist the help of various platforms to help them gain access to financial resources, whether through an organization or collaboration via group contributions.

Thanks to technology, anyone interested in trading can now explore the possibility of doing so, regardless of their background or capital. Do your research, understand markets like the back of your hand, and allow yourself the promise of a potentially lucrative future.

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