International Finance
January-February 2019 Magazine Trading

Gen Next Traders on the Block

Gen Next Traders on the Block
A noisy, frantic trading floor is a diminishing thing of the past; the modern trader is now a lone wolf, digitally connected and equipped with just a mobile phone

Gone are the days of trading taking place exclusively at the world’s busiest stock exchanges. While images of frantic traders shouting to close deals might still exist on television, the reality is that the modern trader is now a lone wolf, digitally connected and equipped with just a mobile phone.

Today’s generation of traders are smart. Imbued with technology, the offer of unparalleled knowledge and 24/7 access to the world’s markets, they are ripping up the rulebook. They are entrepreneurial, and, in many cases, they are the side-gig hustlers – non-conformists ready to forge their own paths.

So how are they using technology to make trading mainstream? This generation, built up of the generation Y’s and Z’s wants to be its own boss. Social media has opened up worlds of possibility and has provided pathways that diverge from the beaten tracks of the generations before them. Since its inception, social media has mutated into a platform to learn from, emulate and showcase success.

Generations Z and Y are some of the most enterprising members of our society, and so it’s hardly a surprise that a new generation of traders is now emerging.

The promise of crypto

In recent years, the public’s attention has been captivated by cryptocurrency. And by extension, this has bled into a rising interest in forex trading. When most people think about cryptocurrency, Bitcoin is the first thing that springs to mind. Whilst most traders watched the development of decentralised networks using digital tokens in place of “real” money with some scepticism, novices were making millions. Unsurprisingly, the concept of investing real money into crypto began to tantalise casual observers.

Today, technology and social media provides a gateway for those who have the desire to trade but lack the detailed financial knowledge. Modern trading does away with much of the “glamour” that was once associated with it; the appeal now lies in the freedom to control when and how you work. The prospect of making your own money without having to deal with fund managers has become incredibly appealing. Generation Y and Z have become more suspicious of and disillusioned with so called “experts” managing their hard-earned cash. After all, these “experts” were responsible for nearly bringing the global economy to its knees ten years ago.

Social copycats

However, trading is not to be underestimated. While social media might make it look easy, there is complex jargon, explanations and a level of understanding needed to think about risk management and mitigation. And, traders need to develop a grasp on their own sense of greed. Holding risky positions and trades for too long in the hope of achieving “impossible” goals can have devastating effects.

The beauty of social media is that it provides a community that’s always online and capable of simplifying, explaining and advising. It’s easy to find out what’s going on in the market in seconds. And what’s more, there is now a new wave of Twitter traders, amateur and professional, who have found demi-fame as established trading gurus to be followed, mimicked and aspired to.

“Piggybacking” off people’s trades is age old, but it has never been quite so prolific. Social piggybacking off successful trades has proved to be exceptionally popular as a way of profiting from others’ expertise, and as an additional revenue stream for those willing to impart their tips and risk management learnings to others for a fee. However, new traders must remember that sometimes it’s possible that you might be following a loser, and that making the correct trades doesn’t always mean you’re being profitable overall. The journey to success tends to be slow and involves many incremental gains.

Bye 9-5, hello 7-10

The side-hustle, the influencer, the sharing economy. 2018 has ushered in a world of part-time freelancers. Without question, technology has been an enabling force for all of these, providing the means for people to strive for more reward and flexibility in their working lives. People entering the working world want to break away from the traditional constructs of 9-5 – they want to define how and when they work.

How trading maps to this is clear, but it is not without risk. Trading can promise a lot; some traders might claim to live off one 15-minute trade a day. But the reality is that the modern trader is facing a job just like any other. It requires persistence, dedication, patience and grit. With the right tools in place, what it does offer is autonomy and flexibility.

In the next few years, we will start to see a shift in education towards topics such as financial investment and management so that no one is left wondering whether they will have enough capital to last them to old age.

Increasingly, there will be more of an effort from all demographics to have an understanding and entry point to the market. With the right knowledge, experience and foresight to understand market volatility and risk, anyone can trade with the technology that’s available.

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