Fintech Innovation in Rule Based Trading – Changing Trading Landscape
Check out 5 Innovative Ways through which Fintechs are changing Rule Based Trading.
The adoption of machine learning, artificial intelligence, and new-age technologies has changed all sectors, including the world of finance.
FinTech or financial technologies have made their presence in the world of trading as well. Thanks to fintech, trading has now turned more user-friendly and accessible to retail traders.
Before the arrival of technology, trading was considered a realm that only professionals and experts could participate in.
Thanks to the advancements in technology and the adoption of trading platforms, a lot of retail investors have gained the confidence to take up trading and understand the markets.
For rule-based traders, who follow predefined instructions when it comes to placing orders, the emergence of fintechs has served as an advantage.
Fintechs involves the use of algorithms and rule-based trading that lends itself to automation.
This way, the machines may be programmed to follow predefined instructions so that an order is placed speedily and efficiently, beating human speeds.
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Innovation by Fintechs in Rule Based Trading
Here are 5 ways by which Fintechs are changing Rule Based Trading –
Mobile Apps – Fintech Innovation in Rule based Trading
Brokerages now have on offer mobile-based apps that let their clients take up trading. Before the advent of mobile apps, traders had to depend on their brokers for trading.
For a rule-based trader, the use of mobile apps has come as a boon as they can benefit from both rule-based trading that involves automation and mobile-based applications that make the whole process smooth and efficient.
Mobile apps also allow traders to trade anytime anywhere, with a few clocks. They also offer additional resources like real-time market data.
Traders who use rule-based trading need technology that supports the buying and selling of large volumes of stocks in an automated manner, without any scope for human error.
This is made possible by the use of mobile apps.
Mobile trading in India has gathered pace, with data suggesting that on the BSE, mobile trading accounted for 20.89 percent of the overall turnover in April 2021.
In the same month in 2019, the contribution of mobile trading was under 6 percent.
Computerized Trading – Fintechs changing Rule based Trading
Computerized trading, which depends on programming, is essentially a set of instructions that help the machine trade, based on price, time, quantity, etc.
Manual trading involves human emotions like panic or fear. On the other hand, trading that is programmed eliminates feelings and stick to mathematical models.
This type of trading keeps errors at a minimum and avoids delays that are caused by humans. Machine-based trading ensures that traders can quickly enter or exit trades.
The evolution of fintech has made computerized trading possible.
Artificial Intelligence – Fintech Innovation in Rule based Trading
Fintech apps that use artificial intelligence empower rule-based trading.
AI can help analyze innumerable data points in quick time, identify patterns of trading, and repeat them to ensure smart trading.
Identification of patterns with the help of data is beneficial to rule-based trading which also relies on data and patterns rather than emotions.
Beginner traders who may not have a grasp on trading may be able to use recommendations and insights that AI offers and trade effortlessly and with confidence.
Paper trading & Backtesting – Innovation in Rule based Trading
Paper trading, also called simulated trading, is ideal for beginners who want to practice their rule-based strategies.
It allows traders to understand the risk-reward scenarios of a particular trade, and learn fundamentals such as entering or exiting a trade, moving profit targets, etc.
Fintech offers paper trading solutions and apps that help rule-based traders test a new strategy before actually implementing it.
Backtesting simulates a model based on historical data and helps test many versions of the same model speedily and accurately.
Backtesting provides insights on how a certain rule-based strategy would have performed in the past in an instant.
Fintech-empowered trading offers backtesting options that help rule-based traders.
Rule-based trading without coding – Fintech Innovation
Before the evolution of fintech, computerized/software-powered rule-based trading involved the use of coding or programming.
Thanks to fintech-powered apps and solutions, it is possible to automate a trader’s rule-based strategies without learning to code.
All a trader needs to do is enter the strategy and get the platform to convert text into codes. The fintech platforms also execute automated trade.
Fintech Innovative Rule based Trading – Conclusion
Fintech platforms use artificial intelligence and machine learning to offer solutions for a rule-based trader.
These Fitnech Brands has opened up trading to all, whether or not they have experience in the world of trading, thanks to user-friendly and accessible solutions.
Traders now have the option of using apps and platforms to execute trades effortlessly.
These apps and platforms ensure that there are fewer errors, bring in speed and accuracy, and help a trader place multiple orders across markets.
A trader can log into their demat and trading account on Angel Broking and check out SmartStore, a one-stop solution that helps traders with carefully curated tools and resources to kickstart rule-based trading.
Like what you see? These are just some of the many reasons to choose Angel Broking, which is fast becoming one of the most preferred broking partners in India.
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