Trading Has Gone Digital. Investors Need to Slow Down

Technology has made investing easier than ever. Australian investors can now buy shares, compare ETFs, research managed funds, watch market videos, read fund updates and place trades from their mobiles. 

That’s good news for investors. It has widened access, reduced friction, and given investors more control. 

But it has created a new problem. When trading becomes almost effortless like this, sifting through the noise to make prudent investment decisions is more challenging. 

The question for investors is whether faster tools are helping them to make better decisions, or simply encouraging more decisions. 

Trading Technology Is Reshaping Markets 

Technology now shapes how markets operate, how products are distributed, how liquidity is provided and how investors behave. 

The regulators are very aware of this shift.  

In August 2025, ASIC began consulting on changes to market integrity rules for trading systems and automated trading, including AI-led developments.  

That tells investors something important: trading technology is now part of the market structure investors rely on. 

Even the cost of market infrastructure is rising.  

For example, in May 2026, ASX shares fell sharply after the exchange flagged higher technology and capital expenditure, including projected capital expenditure of $180 million to $200 million in FY2027. 

Technology is now part of the architecture of modern trading systems.
 

Better Access, Harder Decisions 

The old investing problem was access.  

Investors had fewer products, higher brokerage, less timely information and more barriers to entry. 

The new investing problem is filtering the vast amount of information investors have at their fingertips. 

Investors now face an overload of prices, charts, alerts, product pages, newsletters, social media commentary, fund rankings and market opinions.  

As a result, seeing the wood for the trees has become harder than ever. 

In response, ASIC warned first-time investors not to make rash decisions based on fear of missing out and has encouraged investors to focus on long-term goals before trading.  

That advice is especially relevant in a world where an investor can move from a headline to a trade in seconds. 

This is where technology can become a behavioural trap.  

Real-time prices can encourage short-term thinking. Low brokerage can encourage overtrading. Watchlists can turn into impulse lists. Performance tables can tempt investors to chase what has already worked. 

Technology has improved access, but the need for patience is more important than ever.

ETFs Illustrate the Opportunity and the Risk 

ETFs have been one of the biggest beneficiaries of advancing trading technologies. 

They allow investors to access Australian shares, global equities, bonds, property, infrastructure, commodities and investment themes through a single listed product.  

Betashares reported that the Australian ETF market reached $330.6 billion across the ASX and Cboe at the end of 2025, after growing 34.2% over the year.  

ETFs are technology-enabled investment vehicles. They rely on exchange trading, market makers, digital platforms, daily pricing, online research and portfolio transparency. 

The benefits are clear. ETFs can make portfolio construction simpler, cheaper and more transparent. 

But simple access doesn’t always mean simple risk. 

Before buying an ETF, investors need to understand what it owns, how the index works, how concentrated its exposure is, what the management fee is, how wide the bid-offer spread is, whether currency exposure matters and how the product fits with existing holdings. 

A technology ETF, for example, may provide exposure to themes such as AI, semiconductors, cloud computing or cybersecurity. But it may also increase exposure to US equities, growth stocks, currency movements and valuation risk. 

The trade may be easy, although the allocation decision still requires thought. 

Low-Cost Trading is Not Cost-Free Trading 

Technology has helped reduce the visible cost of investing.  

Brokerage has become more competitive, product choice has improved and investors can compare opportunities more easily. 

But the full cost of trading is broader than brokerage. 

Investors should also consider bid-offer spreads, foreign exchange costs, fund management fees, platform fees, tax consequences and the possibility of poor execution during volatile markets. 

Case in point: ASIC’s review of online trading providers noted that low-cost or zero-brokerage claims can risk masking the true cost to trade. In other words, a trade can be cheap while still being inefficient. 

This matters for ETFs in particular. A fund with a low management fee can still be unattractive to trade if the spreads are wide or liquidity is thin.  

Algorithms Are Not Your Competition 

Algorithms also have a major role to play in modern trading ecosystems.  

They help route orders, provide liquidity, manage execution, rebalance portfolios, and respond to market data faster than any human trader. 

Some of this is positive. Automated systems can improve market efficiency and help keep ETF prices close to the value of their underlying assets. 

But they can also amplify short-term moves, especially when many systems respond to similar signals at the same time. 

For long-term investors, the lesson is: don’t try to compete on speed with these algorithms.  

You almost certainly won’t have an edge in reacting faster than automated systems.  

Your advantage is far more likely to come from asset allocation, diversification, cost control, tax awareness, and a willingness to avoid unnecessary trading. 

The machines may win the milliseconds. You can still win the decades. 

AI Can Help Research But Not Replace Judgement 

Then there’s the emergence of AI. 

It has already become part of the investment process for most investors. It can help summarise fund documents, help with research, scan market commentaries, compare products, identify patterns and organise information. 

That can be useful, especially for investors trying to understand unfamiliar asset classes or compare multiple products. 

But AI also has limits.  

It can produce incorrect summaries, omit key risks, overstate confidence or make complex investments feel easier to understand than they are. 

So, investors should treat AI as a research assistant, not an investment adviser. It can help generate better questions. It should not make the final decision.
 

Scam Risk on the Rise 

The rise of trading technology has also created opportunities for scammers. 

The numbers are daunting. Scamwatch received more than 200,000 scam reports in 2025 with annual reported losses of $335 million.  

ACCC Deputy Chair Catriona Lowe urged Australians to ‘take their time and do their research’, particularly where investment opportunities are promoted through social media. 

That warning belongs in any serious discussion of trading technology. Digital platforms have made legitimate investing easier. They have also made fake platforms, fake endorsements and fake trading dashboards more convincing. 

Investors should verify licences, check website addresses, read disclosure documents and be sceptical of any offer promising high returns with little risk. 

Watch Out for Portfolio Clutter 

One hidden risk of easy trading is the portfolio clutter that tends to ensue from buying small positions easily.  

A few broad-market ETFs, several thematic ETFs, individual shares, private credit, property, cash and speculative positions can quickly create overlap and complexity. 

Each holding may have made sense at the time. Together, they may create concentration risk, liquidity mismatches or unnecessary duplication. 

The solution is to ensure you have a clear allocation framework. 

A Few Practical Rules 

Based on the above developments, before buying an ETF or managed fund, investors should slow down and ask: 

• What role does this investment play? 
• Is it there for growth, income, diversification, inflation protection, capital preservation or tactical exposure? 
• What risks am I adding? 
• What is the full cost, including spreads and fees? 
• How liquid is it? 
• Does it overlap with my existing holdings? 
• Would I still buy it if I could only check the price once a month? 

This is where technology can be genuinely helpful. Investors can use online platforms like InvestmentMarkets to compare products, understand asset classes, watch fund manager insights, read market commentaries and review opportunities before acting. 

Research first. Trade second. 

Technology Brings New Risks and Opportunities 

Technology has made markets faster, cheaper, more transparent and easier to access. It has helped ETFs become mainstream portfolio tools and given investors more information than ever before. 

But it has not changed the fundamentals of successful investing. 

Investors still need diversification, cost control, risk management, liquidity awareness and patience. They still need to understand what they own and why they own it. 

The best use of trading technology is to help make better-informed decisions. 

Before clicking ‘buy’, take the extra step. Understand the product, the exposure, the risks and the role it plays in the portfolio.  

Technology can improve access to information, but it can’t replace human judgement.

Disclaimer: This article is prepared by Simon Turner. It is for educational purposes only. While all reasonable care has been taken by the author in the preparation of this information, the author and InvestmentMarkets (Aust) Pty. Ltd. as publisher take no responsibility for any actions taken based on information contained herein or for any errors or omissions within it. Interested parties should seek independent professional advice prior to acting on any information presented. Please note past performance is not a reliable indicator of future performance.