14 Aug 2017 16:16 IST

How has technology helped traders?

We sounded out some market participants to understand how the digital era has changed their lives

Technological development over the last few years has brought about a sea change in Indian financial markets. The digital revolution has made life much easier for traders in the financial market as everything is now available at the click of a button. We sounded out some traders to understand how the digital era has changed their lives.

Data is king

Be it equity, commodity or currency, data is king, for a participant in the financial market. This is because prices of financial instruments move based on the information available. Positive news on the country’s economy can take stock prices and the currency higher, and vice versa. So, the faster the data or information you get, the more advantageous it is for you.

Earlier, Bloomberg and Reuters were the major sources of information and only those who had access to these were the first-hand receivers of news or data.

But now, internet penetration into every corner of the country has made information available to all.

Sachin (name changed on request), a dealer at the forex desk of an agri-commodity company, says, “the time lag in getting information has reduced a lot — from hours to becoming almost instantaneous or with just a few seconds’ lag.”

Sakthivel Nathan, a full-time independent trader in the Indian equity market, says, “technology has levelled the playing field. Information that was earlier exclusive to big players in the market, like hedge funds, is now available easily to the common man also. Though they have the advantage of getting the information a few seconds ahead of others, it does not matter much to positional traders like me who take calls based on levels on the chart.”

If you think WhatsApp is just to chat with your friends and connect with your old buddies, you are wrong. WhatsApp is now emerging as a new medium to share information in the financial market. Vikrant Sharma, Head-Currency and IRF, PCS Securities Ltd, says, “WhatsApp has become the main medium to share information and Twitter is also used to a great extent today.”

Vikrant feels that the option to use WhatsApp on the web is a big advantage. “I do not have to take out my mobile every time to send a message.

As I monitor the market and trade on my terminal, I can simultaneously message my clients through WhatsApp web, which is a big advantage,” says Vikrant.

Traders say that even the brokers have started using WhatsApp more intensively as a medium to communicate with their clients and to share research reports and other advice.

WhatsApp has also helped to bring together traders from various destinations in the form of groups where information, ideas, etc, are shared.

Traders also believe that being a part of such groups helps them to remain connected even if they are out of the market, on a vacation, or on leave.

Google, Youtube – free study centre

In today’s digital world, dependence on text books to learn new things has reduced. “Google” is the magic word over the world to know about anything and everything.

“Earlier, many of the indicators and terms pertaining to trading were like a guarded secret. But now, you can learn about anything on trading, right from the basics, through a Google search,” says Sakthivel.

He is all praise for the numerous market-related videos available on YouTube where one can see experts speaking, explaining and also teaching — from the basics of the markets to just about everything.

“Google and YouTube have become the new and free study centre now,” adds Sakthivel.

Apps, the game-changer

The development of new mobile applications has made life easy and also faster for a trader. Piyush, an independent trader who trades with Karvy and uses their mobile application for trading, says “earlier you had to depend on your dealer or relationship manager to get market information, like the prices, outlook, etc. But today I get all the information on my mobile app and it enables me to take decisions on my own and also trade on-the-go.”

“Earlier, trading took more time as we had to call the broker, get information and then place the order. Now that time lag has reduced as you trade on your own using the information available on the mobile applications,” adds Sachin. Mobile applications also make it easy to keep abreast of events even when one is done for the day.

“For a forex trader, getting information on the international markets is very important and mobile applications like netdania and investing.com are helpful to get quotes on major currencies, which was difficult to get a few years back,” says Vikrant.

However, Piyush feels that most of the applications available for Indian markets are notuser-friendly and a lot of work has to be done to make themeasier and faster to use.

“BSE and NSE provide apps. But you get live quotes only on the BSE app, where less trading happens. There is a lag of a few minutes in getting quotes on the NSE app, which makes it unusable for the traders,” adds Vikrant.

Beware of too much information

Unlimited availability of information has its own disadvantage, too. The extensive use of WhatsApp as a medium to communicate has increased the number of spam messages getting circulated widely, which is a downside of the technological development, according to Vikrant.

However, as a trader and a participant in the financial market, one should use only the information that is required. “Sometimes there is a lot of noise in the market due to easy and unlimited availability of information. A trader should have the capability to segregate the information, filter it and take only what he wants,” cautions Sakthivel.

(The article first appeared in The Hindu BusinessLine.)