In 2020, a global pandemic was announced, and this hit stock markets around the world. Many traders and investors panicked and sold their stock immediately, which resulted in a catastrophe for the ASX.
Four years’ gains on the ASX were wiped out in one single day. However, the Australian market bounced back during the year with a record-breaking frenzy.
The huge drop in share prices during the pandemic led to many people investing for the first time. Online trading platforms have made it possible for regular folk who have never bought a single stock before to invest and partake in day trading.
How are online trading platforms helping investors in Australia?
Of course, these new trading platforms can help investors from all over the world, not just in Australia, but there are a number of Aussie-based platforms available now.
If you look back before the internet existed, if someone wanted to buy or sell shares they would usually do it by telephone. Share prices were, and still are, available in newspapers, and previously some countries had teletext services to list price data.
Now though, a new wave of trading platforms means that investors can execute their own trades online. Investors, both amateur and professional can use trading platforms on a desktop, laptop, or mobile device now to trade on the ASX and globally.
Can online trading platforms help casual investors?
Many people were trying their hand at day trading before the pandemic, and during 2020 even more decided to see if they could trade successfully.
This amateur boom in trading has been helped by the availability of downloadable platforms. Not all trading platforms are the same though, and some could benefit part-time or amateur traders more than others.
For example, the trading platform developed by Marketech features many tools that you would expect to see in professional environments including live streaming price data. Some of these trading platforms will allow demo accounts to be made and will also provide help and advice with trading, while others don’t.
What features do online trading platforms have?
The idea of online trading platforms is to give users a potential edge when executing trades. To do this, the best platforms will stream live data which will allow the trader to make decisions based on the current pricing.
Breaking news can affect many different stocks. News of bad weather, wars, and shortages can cause sudden changes in price data. Having live streaming on a trading platform is essential for anyone wanting to take advantage of these factors.
Live alerts, personalised watchlists, customisable technical charts, market monitoring, and the ability to trade on the chart are all functions that a good trading platform should have.
You may also find some of these platforms are able to help you with your tax reporting. The Australian Taxation Office has different definitions of share investing and shares trading when it comes to tax. Anyone new to trading may need help in this area too.
What markets do they work with?
Another way that online trading platforms can help Australian investors is by not only giving them access to the NSX and ASX but also to global markets.
Many platforms will allow you to buy and sell on the LSE and NYSE for example. They may also allow cryptocurrencies to be traded as well as forex trading, and EFTs.
If you are looking to invest in a wide range of markets and trade in foreign stocks successfully, it is important to choose the right platform.
Where are your stocks held, and is your money safe?
How you invest your cash will be up to you, and its safety might come down to your trading decisions. However, as far as its security online is concerned, your money will be protected.
People are more aware now of how to protect themselves from cybercriminals when shopping online. You also need to be cautious when banking online or reviewing your finances as you may be vulnerable.
Investing online can open you up to some risks from hackers as can any financial transaction, but many trading platforms will give you a personal cash management account with a respected bank such as Macquarrie.
Your stocks will also be held under your own unique holder identification number or HIN. Unless you choose a trading platform where they are held by a custodian.
Summary
How well these new trading platforms will help you or other Australian investors will come down to which one you choose, and your trading style.
Many new day traders have lost a lot of money by entering the market with little knowledge or by letting their emotions get the better of them.
Choosing the trading platform with the best functions could help to give traders an edge. A little bit of research and level-headedness might help to make very sound investments too.
