Knowledge or Technology: Which is More Important to Forex Traders?

Written by  //  May 25, 2017  //  Business  //  Comments Off on Knowledge or Technology: Which is More Important to Forex Traders?

If you have ever heard of the chicken and the egg conundrum, you will be familiar with a challenge that has prompted discussion for generations. In simple terms, this occurs whenever the value proposition of two distinct groups is dependent on penetration in the other, and it can certainly be applied to the modern forex market. 

After all, knowledge has been central to forex trading success for generations, but there is no way for novice or part-time investors to enter the marketplace without having access to technology. In this article, we will ask whether knowledge or technology is more important to traders, and try to understand the relationship that exists between the two in greater detail.

What is the Most Important Weapon in a Trader’s Armoury?

In terms of knowledge, this is the key building block that empowers traders to first develop a currency portfolio. This involves understanding the unique characteristics of their chosen market, along with the underlying laws that govern change and the role that determinism plays in developing strategies to cope with various macroeconomic shifts.

This creates a solid foundation of general and market-specific financial knowledge, which can be applied to currency trading and a host of other market activities over time. It is arguably most invaluable as a forex trading weapon, however, thanks primarily to the volatile and margin-based nature of the market as a whole.

Then we come to technology, which plays an interesting and in some instances understated role in empowering novice forex traders. While it is fair to say that technology will only ever be as effective as the individual who is using it, innovation in the financial sector has broken down many barriers to entry and made forex trading accessible to a vast, global audience.

In the modern age, however, technology plays a more refined role in the assistance of forex trading. More specifically, it provides practical applications for the theoretical knowledge that has been built by traders, through streamlined brokerage sites, actionable analytical tools and demo accounts. Take outlets such as FX Pro, for example, which allow users to trade online (or through an affiliated mobile app) while also accessing simulated accounts to gain practical experience of the market in a risk-free setting.

The Last Word 

Here, we see a clear relationship between knowledge and technology in the forex market, as while the former preaches trading theory the latter provides practical applications for everything that you have learned. In this respect, they are both intrinsically and inextricably linked, and therefore equally pivotal to the success of every forex market trader in the modern age.

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