Trading Forex on Your Phone: Why It Is Not the Smartest Idea
It’s incredible how far mobile phone technology has come in the last century or so. Nowadays, phones have become more like computers in our hands as we can perform a range of complex operations beyond just receiving and making calls.
Apps are part of the reasons why smartphones have become quite advanced. We are now seeing corporations or brands prioritizing creating mobile applications for their clients to make their products/services more accessible than ever before.
Of course, in this context, brokers and third-party service providers continue to release a range of apps you can find on the Google Play Store and Apple App Store. Understandably, using such applications provide benefits when monitoring your trades is concerned.
Traders can carry out several administrative tasks like depositing and withdrawing funds, observing the latest economy-related news, and seeing helpful notifications.
However, beyond these benefits, mobile trading does more harm than good and can never replicate the experience of using a proper desktop or laptop.
The different types of forex-related phone apps
Technically, not all forex-related apps deal with execution. We have two types of mobile applications. The first are those broker-branded programs from service providers like XM, IG, HotForex, Forex.com, and many others.
These apps do have live and demo trading functionality. However, they are better suited towards organizational operations like depositing, withdrawing, transferring funds between different accounts, opening new accounts, live chat support, broker-related notifications, and more.
Although many broker-branded apps allow their clients to trade, they are rather stripped-down in capabilities, leading us to the second class of apps. These are primarily built for execution and attempt to be as feature-filled as their computer counterparts.
Here, we refer to apps like MT4, MT5, cTrader, TradingView, etc. You can perform pretty detailed technical analysis and place real or demo trades in the markets with these facilities.
The one advantage of mobile apps is the execution is a bit faster than on a PC. However, these applications do more harm than good by and large, particularly if you’re not experienced. Yet, let’s first cover their benefits.
Where using your phone in forex trading is useful
Aside from the administrative duties we mentioned, a mobile forex app can help professionals monitor and exit their positions.
You could use a phone to observe your positions while you’re away from your computer. This would be done passively to give the trader an idea of how much profit or loss they have at certain times.
Another example is if you were waiting for a pair to reach a particular price, you might check your phone periodically until that moment arrives. Alternatively, you could receive notifications through this channel via email.
The phone can allow the trader to execute better because they wouldn’t have to wait longer due to the convenient access. It’s worth noting this would only work once one has carried out proper analysis beforehand on an actual computer.
Similarly, a phone can come in handy for exiting a live position, typically one in profits. Again, this could happen if a trader was not near their desktop or laptop.
For instance, one might decide to close their trades before or during a high-impact news period for fear of price acting unfavorably due to the volatility associated with these events.
Yet, it takes an experienced trader not to fall into any of the traps in either of these benefits. It’s natural to potentially make rushed and emotional decisions often because phones are built to be distractive.
The main problem with using your phone in forex trading
There are two primary reasons why trading with your phone is not the smartest idea.
Smaller screen size and feature limitation
The most significant hindrance with mobile trading is the smaller screen size. On average, your average smartphone has a screen between 5 and 7.5 inches wide.
If we compare this with the average laptop available nowadays (13 to 15 inches), we can observe a world of difference. The image below shows an illustrative comparison between the two.
This limitation means the extent of your visualization and analysis is severely restricted.
Ultimately, a trader sees things as they are with a larger screen. The point of using and viewing time-frames is seeing price action data from months and years away, which is easily visualized on a personal computer.
With a phone, you don’t have this panoramic view of sorts. Furthermore, because the screen is a lot smaller, you have far fewer features, which is a severe disadvantage.
For instance, with any of the MetaTrader apps, you can only access a certain number of indicators, graphical objects, etc., understandably because of the tinier screen.
Overall, you are settling for less when using a phone, which can dramatically affect the quality of your decision-making.
The other major problem with using a phone is distraction. Trading is an endeavor requiring careful concentration and serious discipline. Phones are known for having a plethora of random pop-up notifications that you are likely to see even if you were on a chart.
Of course, these distractions will affect your thinking and analysis. The other issue is the environment. Because phones are highly portable and convenient, you can access them virtually anywhere, especially in public spaces from restaurants to buses.
These are certainly not conducive settings that offer you a clear mind to make any trading decision. However, if you were using a computer, you naturally instill more focus because this device is less mobile and requires you to sit down and concentrate.
You should think of mobile apps as a supplement to your trading rather than the primary device to participate in the markets. It can help you quickly access your account by performing some of the mundane yet beneficial functions, monitoring key levels, and exiting your positions.
While smartphone technology has allowed people to execute various tasks previously reserved for traditional home computers, it cannot fully mirror other operations to their truest extent, including properly trading forex or any financial security.
Ultimately, if you cannot afford a proper laptop or desktop, it is best not to trade the markets in any capacity (whether demo or live) until you have the means to own one.
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