The number of retail investors spiked during the pandemic as millions of people were forced to stay at home for months with an unprecedented amount of free time and a limited choice of activities. It’s only natural that many of them became interested in investment and trading apps. The major apps of this kind saw record installs in 2021, and this rise seems to be more than a fleeting trend.
Let’s see what drivers are behind this surge apart from a desire to make extra income while staying at home.
Mobile Internet Usage Is Growing
As the number of smartphone owners is rapidly increasing, more and more people in emerging economies get access to investment opportunities. These days, you don’t need to invest in a powerful PC and sophisticated software. Instead, you can start trading from your phone using one of those intuitive apps. Simple and clear when it comes to UI design, such apps are loaded with tons of useful features and additional resources.
As most popular trading apps apply well-tested UX solutions, their logic already looks familiar to most first-time users. It means a smooth start for millions of untrained investors.
To make things easier, these beginner-friendly platforms integrate the best global and local e-payment methods for hassle-free deposits and withdrawals. For instance, a popular trading app, Olymp Trade, makes it possible to fund your accounts using USDT payments ー fast, secure, and cheap.
The Barrier to Entry Is Now Lower
In the past, trading and investing used to be activities with high entry costs. It is no longer the case.
At the beginning of 2020, Robinhood created an offer of 0% commissions to ensure a massive influx of new users. Other popular trading platforms were forced to follow this example to stay in the game. As a result, dozens of millions of people were converted into amateur traders within a short time.
Additionally, the stock market was experiencing high volatility due to the health crisis. The uncertainties it caused led to the market crash in March 2020, when many good stocks fell to their historic lows. These factors combined to allow even low-income investors to join previously inaccessible opportunities to profit.
In 2022, many apps focused on retail traders come with 0% commissions for many operations and have low minimum deposit amounts. Some platforms also offer trading fractional shares, thus bringing the stock market within anyone’s reach. It’s a huge advantage, considering that their customer’s investment capital may be limited to a few hundred dollars.
Trading Becomes Easier and More Fun
To keep their customers active, trading platforms develop and test novel promo activities. These include prize drawings, tournaments, and contests, adding elements of sports rivalry, surprise, and fun. It especially appeals to zoomers and younger millennials who take the lead in shaping trends for retail trading.
The tendency has become especially obvious in the last couple of years. Of course, a lot of old-school investors may be critical of these attempts to democratize the world of finance. However, making trading more fun and less elite is an excellent way to reach out to younger generations. Many of these people are easily bored and appreciate action-based learning. You should take these factors into account to build a successful trading app.
What started as an experiment might soon become a new industry standard.
Trading Apps Increase Their Social Media Presence
These days, retail traders often use social media networks like Facebook, YouTube, Reddit, and Twitter as a main source of information. Here, they look for financial advice and share their issues to get them solved by more experienced peers. Besides, following your trading platform on social media is the best way to stay updated on its new product releases and promo activities.
Social media feeds let traders get an immediate analysis of market conditions and make faster and smarter decisions. Additionally, trading platforms often post tips and tricks to help traders harness the full power of their apps and highlight some rarely used features.
Another advantage of social media is that it gives new traders a sense of community. It’s priceless for many people, especially if their real-life friends are not supportive of their hobby.
To meet their customers’ needs, trading apps are increasing their social media presence across multiple platforms. Their official pages are interest clubs where members can benefit from crowd wisdom, boast their achievements, get inspiration or new ideas, or just share a fresh meme. Besides, social media helps platforms earn lots of new users through targeted advertising.
Learning Resources Become Accessible for All
Last but not least, trading and investment apps grow in popularity due to the accessibility of educational resources.
Whatever your level of experience and skills, you can always find materials helping you understand trading jargon, master various strategies and tools, analyze chart patterns, and spot profit-making opportunities when reading market news. There are dozens of online courses helping beginners take the first steps in trading. Apart from that, you can take advantage of the useful content many trading apps create for self-learners.
For instance, one of the largest brokers catering to retail investors worldwide, offers a range of educational materials targeted at different types of learners. There are YouTube videos, a constantly updated knowledge base, live streams held by the platform’s analysts or guest experts, blog posts, you name it.
It encourages newbies, most of whom have no opportunity of being traditionally educated, to get their feet wet in trading.
These five trends are working in synergy to increase the number of retail investors. Many of these people practice trading as a hobby, while also having a full-time job. A convenient mobile app makes it possible for them to combine both.
It seems that we are witnessing the profound transformation of the sector, massively influenced by a new class of investors.
As trading apps are the best answer to these people’s needs, they are likely to thrive in the foreseeable future.