the implications of taking positions on the move have yet to reach their logical conclusion
COMPETITION has arrived in the UK’s 4G market, promising superfast download speeds on the move. Previously monopolised by the operator EE, O2 and Vodafone have just rolled out 4G mobile internet connections to their customers in London, with O2 also offering the service in Leeds and Bradford. It was a small-scale launch, but there’s more to come. Both plan to extend the scheme to another 13 cities by the end of the year, and Three is expected to disrupt the market further in December, by offering unlimited 4G data.
A study by Capital Economics, commissioned by EE in 2012, found that 4G could give a boost to UK GDP of up to 0.5 per cent per year. But it’s not just the economy that could benefit. The rise of 4G has coincided with a boom in mobile trading. According to Craig Inglis of CMC Markets, 31 per cent of the trades made by CMC’s clients are now executed through a mobile device. Meanwhile, 65 per cent use mobile software as a part of their trading – double the proportion from just nine months ago.
“Over the past year, we have seen an incredible increase in the momentum of mobile trading uptake”, he says. “A technology that used to be relatively niche in markets is now forming an integral part of trading for many.” As the difference in processing power between desktop and mobile devices narrows, and new developments in network speeds such as 4G take effect, many expect this trend to accelerate further.
But while traders continue to benefit from the obvious portability of mobile devices – positions can be opened or closed on the go in response to the latest news – the functionality of mobile apps has also improved dramatically in recent years.
“Modern smartphones and tablets are powerful enough to include almost all the trading tools of the desktop and online versions”, says DF Market’s Evgenia Chausheva, who has been involved in the development of mobile platforms since their introduction. The MetaTrader 4 mobile platform, meanwhile, used in the apps of some major spread-betting providers, “offers exactly the same possibilities as the desktop version” says Rushi Parikh, head of IT systems at Tradenext.
One of the key recent improvements has been the expansion of the charting packages on offer. Traders who may have used apps purely to monitor spot prices in the past can now perform analysis, ranging from the essential moving average indicators to more advanced oscillator analysis.
Brett Evans, ETX Capital’s product manager, highlights the range of options available to traders employing technical analysis. “The software incorporates analytical tools including standard moving averages, Bollinger Bands, the moving average convergence/divergence indicator, and momentum stochastic charts all in the candle, line, mountain and bar chart options.”
The limitations of the relatively small screen on smartphones may present a difficulty for some. But tablet screen sizes look set to grow, and the introduction of clearer, larger displays, along with the ability to more easily zoom in on details, may accommodate many charting needs. The new Samsung Galaxy Note 10.1 and Google’s Nexus 10, for example, have 10.1 inch screens.
The Samsung also offers split-screen multi-tasking – meaning multiple charts could conceivably be viewed simultaneously – along with a stylus for drawing on charts. Chausheva points out that, for traders who like to draw their own trend lines, “the adoption of styluses and pressure-sensitive touchscreen displays mean tablets can now rival desktop charting, especially if the technology becomes more widespread.”
Beyond functional improvements, however, the faster capabilities of mobile connections on 4G networks mean download speeds and trade execution times have caught up with Wi-Fi. Ofcom says download times on a 4G connection are around 5 to 7 times faster than 3G networks, based on existing 3G speeds of 1 megabits per second on average, and compared to around 6 megabits per second on 4G.
Technology expert Ernest Doku of uSwitch.com says that, “much like with current mobile coverage fluctuations and patchiness over 3G, not everyone will get the advertised superfast experience all of the time.” But the overall experience will undoubtedly be superior. Traders with 4G-enabled devices are likely to see noticeable improvements in speeds.
As Chausheva says, “seconds mean money, but unless the trader is using mobile software to automatically send a huge number of orders, the difference will not be huge.” The current generation of apps tend not to be signal-heavy, so while the extra speed will be welcome, it will be more of an incremental improvement than a qualitative leap.
Despite the continued improvements in functionality and connection speeds, many traders still prefer desktop terminals to mobile devices. Jannick Malling, chief executive and founder of Tradable, a platform allowing users to customise their trading experience by adding third-party apps, still sees “mobile trading as complementary to desktops, rather than a replacement – at the moment.”
Malling says that “some traders prefer to do deeper analysis through their desktop, and analysing more than one chart at once is far easier with several desktop monitors in front of you.” He sees the next five to ten years as potentially transformative in this regard, pointing out that forecasts of mobile trading uptake made just a few years ago have already been exceeded.
Looking further into the future, Inglis can see mobile technology becoming the prime conduit for both market information and transactions. “We’re looking at the possibility of iPads and other mobile devices taking over as the main focus of the trading experience,” he says. “Developers and traders recognise that 24 hour access to data is now a feature of global markets.” The idea is to get the trading experience as pure as possible, free from clunky interfaces and highly responsive to market signals.
Taking this thought to its logical conclusion, Inglis and others are looking at the area of wearable technology. The functionality of Google Glass, for example, has enormous crossover with the needs of traders. This month, Fidelity Labs, one of Google’s early development partners, launched the Fidelity Market Monitor, a piece of “glassware” providing real-time stock alerts and financial news feeds. Traders could conceivably receive essential figures and charts straight into the visual cortex, and place an order within seconds.
The thought of someone opening forex positions mid-conversation may sound strange, but recent developments suggest that mobile trading will increase in popularity and reach. While market players once faced a trade-off between performance and portability, mobile technology is increasingly giving traders high-powered devices on the move.