Trading From Your Phone: PROS And CONS

edge risk Apr 03, 2024

Can you trade with your phone? It’s possible. Yes. SHOULD you trade on your phone? NOT RECOMMENDABLE.

Cellphones have been around since the 1970’s but the first smartphone to hit the public market was in 1994 by IBM. It was a new age of multiple tools being consolidated into one, portable device. Enter the advent of the modern internet in 2000 where the internet became easily accessible.

Fast forward to 2007 and the release of the iPhone changes the mobile market forever. It changed the way we used apps and accessed the internet, more importantly, stocks. With the default Stock app pre-installed on apple devices, anyone who purchased an iPhone could easily pull up a ticker they were interested in and find out what a company was valued at.

Today, high-speed internet in the form of 5G and upgraded computer processing, the smartphone is here to stay and has revolutionized the way current society functions. It’s no wonder why trading from your phone has become so popular. Mobile trading is only going to be getting better and is growing at a phenomenal rate. However, there are a few things to understand about trading with your mobile device. Just because you can doesn’t mean you should.

Nowadays, it’s incredibly easy and convenient to trade from your phone. However, there are some things to be aware of if you are currently, or thinking about trading from your phone.

Depending on their style, many professional traders have two or more monitors as their main trading station. The reason is with trading, there is much info to be gathered and looked at. Chart comparison, news releases, multiple positions that need to be monitored, etc.

That being said, what makes you think shrinking all that information of both technical and fundamentals down into the average 4.7 – 6.5-inch screen size would generate the same results as a trader who has a bigger screen or multiple monitors? The hard truth is you’re unlikely to gain the same amount as you would trading from a desktop/laptop on a phone. A phone simply does not compare (currently) to a monitor.

My best advice for any trader considering using their phone in regards to trading is to strictly use your phone as a MONITORING and MANAGEMENT tool.

Limit day trading on your phone. Avoid it entirely if possible. Understandably, everyone’s trading style, and system are different but regardless, you can’t see a clear bigger picture on a 6-inch screen.
Avoid WATCHING the market move on your phone. This is a rule even on a desktop. Don’t hover around the charts to watch price move tick by tick. Set and forget your position. Trust your analysis and your system.

DO:

Have a good data plan. Have a speedy and reliable internet connection. – An intermittent connection is one way to accumulate losses.
The more recent/updated device you have, the better functionality.
Have a VPN on your mobile – Some countries have certain regulations regarding Forex; A VPN bypasses most hindrances.
Follow your trading plan even on the go.

With the convenience of being able to access the charts from a phone, are we allowing more losses? Absolutely yes. Overtrading is the biggest concern with regard to trading on your phone.

With such easy access to the market it’s easy to fall in the perils of forcing trades and making irrational decisions.

Having a rough day? Take a look at the charts, place something that is a mediocre set up at best through your phone, before looking at the charts from a desktop or laptop, the trade fails and the cycle repeats itself until your state of mind changes or your environment changes. Both of which could take a while.

This means trading from mobile has a high tendency of leading into overtrading. I want to be clear however since you are overtrading on your phone doesn’t mean you won’t make the same mistakes because something like overtrading has deeper issues of the psyche – more on this later. That being said, trading from a phone INCREASES the likelihood of doing even more overtrading.

It can be argued from this point of view that if you aren’t psychologically checked into trading you’re going to fail regardless if you’re trading on a computer or a mobile device.

Distraction. You could be out in a line at a grocery store, or on public transport and just checking up on a potential position and feel on a whimsical whim to enter a position. It could be rushing the trade, it could be Fear of missing out on the move but you enter a position. But guess what? Your friends were talking to you, or the cute cashier distracted you, and without realizing, your stop loss was misplaced resulting in a closed trade for a loss within minutes. All because you were distracted. Your environment where you trade is very important.

If you want to take trading seriously, and can only do it from your phone, set specific times to do so. ALWAYS BE MENTALLY LOCKED IN WHILE TRADING. Don’t multitask!!

It’s amazing though. To be able to have immediate access and control of your account in real-time. As stated above, the primarily usage for mobile trading should be for monitoring and management.

Scouring the markets for a position when it’s hard to see the bigger picture on a 6inch screen is a recipe for disaster.

A trader should at least be using a 13inch screen or bigger.

Check positions and adjust those positions accordingly to your plan only. If a trade moves aggressively, maybe an SL needs to be moved to BE, or if the price has pulled back more than anticipated, a take profit could be necessary. Again, if it’s in your plan.

It’s okay to look at trades on your phone, but don’t actively trade from your phone. This means you aren’t applying technical analysis when you’re on your phone. Instead, it should be almost mechanical in nature as to moving your SL. Use your phone to track not to trade.

If you trade more on your phone than using an actual desktop, you aren’t trading properly be careful of creating bad habits.

There have been times where I’ve checked my trades and management them only to get on a proper trading station to find price took me out because on a tiny little screen things appear different. An hour later price continues in my favor.

Great way to obtain market news and information.

CONCLUSION

Although mobile devices offer a great way to obtain market news and information there are a few things a trader should be aware of. Distraction and overtrading are big concerns when trading off a 4-6 inch screen.

It’s inevitable with the development of technology that phones are getting better and better. At the risk of sounding stubborn, nothing can beat a solid monitor setup. Heck, nowadays we can link our phones to monitors so who knows where the future will go with trading.

Overall, understandings the risks of trading from a mobile phone will save you from unnecessary losses and heartache.

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