London, 18 December, 2024 - From being a record-breaking year for election activity across the globe, to the heightened levels of geopolitical instability, there’s no doubt that 2024 was a year of change. For the financial markets, uncertainty creates volatility — which, for traders, can mean opportunity.
As we come to the close of what has undoubtedly been a turbulent 12 months, I wanted to take a moment to reflect on some of the trends and developments that we’ve seen in the retail trading space in 2024, and what might lie ahead in 2025.
The rise of skills-driven traders
The modern retail trader is increasingly motivated by non-financial as well as financial rewards. While profiting from movements in the financial markets remains a key priority, today’s traders are often driven by the desire to learn new skills and the sense of achievement this delivers. This is particularly true for newcomers to the market.
This trend is noticeably pronounced among the younger demographic of traders, who are savvy in utilising technology and social media to develop their knowledge. We’ve really seen the concept of social trading expand as a result: while once it typically meant a trading idea published by one individual and copied by many, today we are seeing communities of traders sharing information and comparing ideas on a much broader scale, fostering a 'community feel' around trading, which could have been a slightly isolated activity in the past.
Beyond learning new skills, traders are extremely keen to understand and assess their own progress. For brokers, providing the charting and analytical tools that enable users to gain deep insights into their trading activity is no longer a nice-to-have, but rather a core feature.
Meeting users where they want to be
In a competitive environment, the challenge for brokers is how to engage with users and how to keep them engaged with us. In the current landscape, consumers have more choice than ever in who they interact with, and providers need to be agile enough to meet them where they are.
Offering mobile capabilities throughout the entire lifecycle is extremely important: while once, traders would primarily interact via desktop and occasionally via mobile, this has now been flipped on its head. OANDA internal data suggests c.36% of our clients are executing on our mobile platform (android or iOS), which we see as being in line with industry averages. Additionally, an increasing percentage of the full client lifecycle (onboarding, funding, etc) now also takes place via mobile app. This insight indicates that traders organise their trading activities to accommodate dynamic lifestyles: they may do most of their charting and planning on desktop, but they also use mobile as an extension of this to execute, monitor and adjust their trades and stay connected with the markets. So we’re really looking at a wider trading infrastructure, in and out of the home.
In the past, larger brokers in particular could also be prescriptive about the use of their own proprietary platforms, but today’s users want flexibility and cutting edge technology that provides a frictionless experience. As a result, third-party platforms are key as traders seek out the features that best suit their trading style and motivations. We know trading is so much about feeling comfortable and confident to make a trade using whatever platform a trader feels gives them an edge; this varies from trader to trader. In the race to differentiate from the wide range of brokers in the market, the quality of the trading experience is now king — from intuitive apps to a slick mobile-first experience.
Brokers can further unlock flexibility for users by providing more diversification options. According to insights from our client engagement research , traders from different regions view product range as a crucial factor when selecting a broker and a major motivator for consolidating their accounts, which is a growing reason for switching. However, our internal data still shows that many traders have a tendency to concentrate on particular instruments, so we see this shift to multi -asset trading as a way for traders to take advantage of volatility when it happens, dabbling in a wider variety of trades when a "too good to miss" opportunity arises.
What’s on the horizon in 2025?
Expectations around execution, reliability, and good customer service must be met. While amid the likelihood of continued volatility in the global landscape next year, brokers must be able to support their clients’ needs in the moment. That means having the platforms, capabilities and communication channels in place to operate at scale and pace, enabling traders to seize opportunities.
From OANDA’s perspective, we foresee the prop trading space continuing to grow in 2025 — perhaps even rivalling the traditional FX/CFD industry in time — as awareness increases among traders and as a result of the accessibility that prop trading offers. It will be interesting to see how the “prop trader” user experience will influence the expectations of retail traders in their self funded accounts.
Lastly, AI will, perhaps unsurprisingly, continue to impact our space. We’ve already seen generative AI start to reshape industries in a relatively short amount of time, and we can expect that it will open up new ways for retail traders to quickly and easily source trading ideas and opportunities. AI-powered tools, such as advanced EA-driven trading or assistance with trade analysis and algorithmic trading are becoming important features. Earlier this year, when asked by Investment Trends about the impact they expect generative AI tools to have on their trading, UK traders expressed a positive outlook, particularly less experienced traders. [The majority were willing to incorporate AI into their trading and investing activities, seeing applications in data analytics (49%), risk assessment (41%), and research/modeling (36%), but less so in stock picking (35%)].
It will be interesting to see how brokers and the wider industry respond to these advancements, but one thing is certain: those that shape their propositions based on client insights are likely to lead the way.
By Lucian Lauerman, Deputy Chief Operating Officer
