Dos and don’ts of mobile trading
THE rise of mobile trading over the past few years has been tremendous and it’s easy to understand why. Before the launch of the iPhone, most mobile platforms were fairly average with poor usability and a lack of trading tools to make the most out of trading on the move.
Today you can trade wherever you are while researching positions with interactive charts and financial news direct from the palm of your hand.
Three years ago, the average volume of trades we took from clients via their mobile device was just 2 per cent, while less than one in ten clients actually used their mobile devices to trade.
Today these figures stand at 20 per cent, with one in three clients using their mobile devices to trade; and it continues to rise. In addition, the advent of tablet trading is expected to further increase the volume of trades being placed outside of more conventional forms of trading.
One of the key benefits to trading using the mobile trading platform, is that it enables you to maintain a higher level of awareness of your positions and market prices instantly.
However, while the advantages of mobile trading are there for all to see, there are increased risks which unfortunately, are not widely recognised by most.
This lack of awareness can sometimes bring dangerous temptation, and can also become a key risk. Maintaining discipline in all circumstances of trading is a crucial element towards the success and failure of your trading account.
In my opinion, by having access to live market prices and constantly fluctuating profits and losses, the temptation to close positions early or enter markets prematurely, without a considered strategy in place, is increased.
But while there is potential to make irrational trades based on impulse, this is not to say traders should be fearful of trading through a mobile trading platform. I believe traders should absolutely use their mobiles to trade, but most importantly only when the circumstances create a trading opportunity.
TOP 5 DOS
1 DO keep an eye on your positions and the markets.
2 DO use your mobile to research future positions and current price trends.
3 DO keep an eye on the big picture; your account balance and margin requirements are just as important to watch as your open trades, which can often be overlooked when trading on your mobile.
4 DO keep an eye on your mobile connection.
5 DO remember not to chase the markets; trade the opportunity when it arises.
TOP 5 DON’TS
1 DON’T trade on impulse.
2 DON’T forget risk management tools such as stop losses.
3 DON’T forget your security settings; you can adjust your security settings to protect your account in the event that your phone gets lost or stolen.
4 DON’T forget your trading strategy.
5 DON’T overtrade; increased access doesn’t necessarily mean increased trading.
Joshua Raymond is chief market strategist at City Index. Our brilliant trading conference Active Trader – at which Raymond will speak – is on 24 May 2012: www.cityamactivetrader.com