0
0
“Time is money” is a phrase many people know but very few practice. In the case of traders, it’s a tangible cost that manifests itself each time you go from one application to see the chart, switch to another to place an order, then switch yet again to keep tabs on your portfolio.
Many traders are not aware of the cost associated with such activity. After all, app-switching is a quick and easy process; just a few taps and clicks away. The problem, however, is that in a market that operates in fractions, a few seconds often determine whether you make a profit or incur losses.
Hidden cost of switching apps
Each time you switch applications, you are disrupting the flow of your trading session. You lose sight of the price that you are following, of the option chain that you had been studying, or of that exact moment you intended to enter a trade.
By the time you get back to the right screen, the market would have changed, thus making a stock you intended to buy a second ago overvalued, thus reducing the margin of your expected gains.
It’s also worth noting that the above problem is not a one-off phenomenon. Traders who use separate applications to monitor charts, to place trades, and to keep track of their portfolios experience the cost of app switching numerous times a day, week in and week out.
But what are you really losing?
On the surface, the cost is financial in nature and is reflected in slippage, missed entries, and delayed exits. There are, however, other costs that are less noticeable.
Having more than one application while trading raises the risk of making errors. One can trade the incorrect security or even place an order with the wrong number of stocks. It is possible that one will overlook updating the stop loss point owing to constant app-switching.
There is also a psychological cost involved. Trading is a task that requires you to focus and react quickly. By splitting your attention between several applications, you increase your stress unnecessarily, thus making it harder to follow your strategy.
How having everything on one screen helps
The solution is not to reduce the attention you pay to the trading but rather the number of steps it takes for you to act on what you have seen.
A trading app with advanced option chain analysis eliminates the need to leave the screen on which you are placing your orders to see the details of strike prices, open interests, and implied volatility. Thus, a single trading application saves you one whole step of app switching for options traders.
Similarly, the fact that you can access charts, watchlists, place orders, and manage your funds from a single interface means that you pay your attention to making decisions and not navigating between applications. Such is the basis for the idea of an all-in-one trading platform, which unifies research, execution, and portfolio management under one account.
How to make it work for you
Start off by identifying the apps you use currently to access charts, place orders, and transfer your funds.
It will be evident to most traders that the process they use to do what a single platform could have done consists of using two or three applications at a time. For example, an all-in-one trading platform where you can analyse options chains, execute orders, and track your portfolio makes your job easier.
Fewer screens you have to use before placing your trade means fewer opportunities for delay, distraction, and mistakes. In the market that moves by the second, this could mean the difference between a profitable trade and a missed opportunity.
Conclusion
App-switching may not appear problematic when trading, but in reality, it comes with real cost implications. All forms of slippages, lost entry points, and unnecessary errors are a result of the same issue – too much process in executing the trade.