Crystal Ball: Insights from IG Markets on what our future trading world may look like
Experts
Experts
Good investing is all about looking into the future.
It’s a process of assessing risk, making an educated projection of future cash flows and analysing the key drivers for a particular company or industry.
But for a bit of fun, what if we looked really far into the future – say, 50 years. There are a number of interesting questions to ponder when it comes to the trading landscape and how investors will manage money.
It’s a fun intellectual exercise to brainstorm what the future investment universe will look like. And in the event that exponential changes in technology create a whole new trading paradigm, it’s worth considering what shape it will take.
Of course, it would take a brave forecaster to envision the investment landscape with certainty 50 years from now.
But to get the ball rolling, the research team at IG Markets have highlighted 10 interesting ideas that right now are just dreams or prototypes, but which could become reality down the track.
The concepts cover ideas such as the influence of blockchain technology, to more futuristic predictions around advanced artificial intelligence and the potential amalgamation of man and machine.
Hit this link for a detailed interactive summary, which includes further analysis of the future trading environment backed by plenty of contemporary research.
For now, here’s a concise wrap of some of the key takeaways.
One prediction from the IG Markets team is that in a few decades’ time, trading exchanges as we know them will be ‘history’.
Instead, trading from London to New York, from Hong Kong to Sydney will take place via a sophisticated blockchain network, with many traders executing trades using cryptocurrency tokens.
Using a tokenised network will allow traders to, among other things, specify the value of their trades to a much more finite level – say, 0.000001 of a particular token.
For hypothetical trading purposes, IG Markets uses the example of a proposed ‘D3’ token – based on the three most commonly traded fiat currencies (the USD, Euro and Japanese Yen).
While views towards blockchain and crypto in the investment community are still relatively polarised, this is still an idea that is already beginning to shape in real markets.
A good example is the ASX – Australia’s primary trading exchange – which is preparing to phase out its existing settlement platform. Instead, the ASX is tracking towards the implementation of a clearing & settlement network based on blockchain technology, with the live rollout currently scheduled for April 2021.
And despite regulatory holdups, the major players in global payments remain engaged with the process of developing a more globalised currency. In that context, it’s not out of the question that such technologies could change the way trading transactions are carried out in future.
While most investors can at least wrap their heads around the idea of blockchain, the IG Markets team also speculated that the next 50 years could usher in some truly ground-breaking technological changes in the world of trading.
One idea – which wouldn’t be out of place in a science-fiction movie – would remove the use of machines altogether. Instead, trading will simply be ‘powered by thought’.
In a futuristic trading landscape, some traders will choose between the use of advanced headwear for brain-machine interactions. But most traders will take the (some would say braver!) option of having an internal microchip inserted into their brain to carry out instructions.
Could it happen? It’s probably a long way off, but that doesn’t mean it’s not being investigated as we speak – from advanced neuroscience departments of elite universities, to the military and major corporations.
There are plenty of other fascinating ideas compiled by the IG team, including augmented reality technology – where mobile phones will generate 3D trading models.
The analysts also consider the rise of quantum computing, and how high-speed data and advanced AI will see technical (chart patterns) and fundamental (company research) analysis merge into the same thing.
If nothing else, it’s simply a fun activity to speculate on what our future world will look like.
To delve deeper into these insights and more, head on over to the IG Markets research page on the Future of Trading.