In online trading, everything is done by computers and software. It’s a huge financial system that heavily relies on well-established underlying technologies. These technologies include fast, secured and reliable internet connection in conjunction with fast hosting provided and reliable data centers. Well-written software, too, plays a big role in this regard.
Online trading consists of millions of transactions per second, conducted by millions of traders 24/7, so a powerful underlying infrastructure is a must. For these millions of people to interact with the trading platform and execute buy and sell transactions of various asset classes, well-written software applications are required.
Generally, infrastructure is very important in any working system, and online trading heavily relies on it. All data centers need 24/7 monitoring. If something goes wrong, it must be corrected immediately, or millions of clients could suffer, which can potentially damage the online service provider’s image and reputation. This topic and the role of infrastructure will be our main focus during this article as it will make your trading more effective and protected from technical risks.
Parts Of Infrastructure For Online Trading Services
Now that we have talked about the importance of infrastructure, let's describe its parts. But before that, it is significant to note that for selecting the trading platform, it is needed to be informed about the key features of infrastructure that can make a trader's decision much more effective. For that, we would like to advise you to check these guides about online trading platforms as it can make it easier to know why good infrastructure matters for your trading experience.
When a trader clicks to buy or sell an asset, the trading platform goes through a complex path to execute the order. First, the trading platform receives an order and relays it to a specified exchange address where the transaction is executed and feedback is sent to the trader showing that they traded the asset. To add to this connection to Nasdaq, Nyse, or any other electronic trading exchanges requires complex software and powerful hardware so that trades are conveyed to a destination exchange fast and secured. All this has to be encrypted and secured not to fall to hackers.
Some parts of online trading services infrastructure include:
Data center - it is a building specifically equipped and maintained to run powerful computers with massive hard drives which can take a heavy load. All client usernames, passwords, and data must be saved somewhere for the website to load. Data centers are exactly that, saving huge amounts of data and enabling them to quickly interact with it. They enable the upload or download of any requested information. Powerful computers and hard drives generate lots of heat and need good cooling solutions and 23/7 monitoring.
Hosting - it is important that the website is responsive, loads fast, and is easy to use. Hosting is key to loading your preferred website quickly. If the website is slow it negatively affects the service provider’s reputation. In the case of web trading platforms, this speed becomes a key feature. Hosting usually is a company that has rented space in a data center.
Well-secured building - it may seem lame to mention it here but actually, a specifically equipped site is the most important part of the infrastructure. Data centers are good targets for hackers and thieves. So, physical security with a good software firewall is a must. It requires not only security guards who check and monitor who enters and exits the data center building, but also programmers who can program and protect the data saved on hard drives. Setting up a good data center is a huge responsibility.
Software - when in an online space, software plays a key role in everything. To establish a connection between exchanges and brokerage firms, to convey transactions from one exchange to another requires not only physical equipment but also fast and efficient software. And this software must be secured from hackers. Software security requires high-level programmers who can check for software vulnerabilities and correct bugs in the system. When traders need to buy and sell huge amounts of stocks, cryptocurrencies, or traditional currencies, every second matters, and in the end winners are those who can execute trades without interruption.
Conclusion - The Role Of Infrastructure
A good internet connection is something that no one complains about nowadays but underestimating the importance of a fast, secure internet connection is a big mistake.
To summer all it up, key infrastructure elements are:
- Fast internet connection (reliable internet providers).
- Efficient, light, and secured software.
- Fast hosting with enough bandwidth to support required user interactions per second.
- A well-maintained data center. A keystone and main element of online trading services infrastructure.
So, infrastructure plays a major role in online trading services. Setting up a working online trading platform is a big challenge. Trading is possible with a few clicks. If you want to trade with automated software you can use cloud services to run your own trading robot 24/7. Many online trading platforms provide all trading services and you can get comprehensive information from them.