Trader’s Guide to the Internet of Things

Most stock traders spend a lot of time online. In the course of your internet meanderings, you’ve probably come across the term ‘Internet of Things’ or IoT. But you might not understand what that is or why you should care.

In today’s article, we’ll take a look at the basic concepts and how they might impact your life and your trading business.

What is the Internet of Things?

Until recently, the purpose of the internet was to facilitate communications between humans.

For example, you log into a social media app (like Facebook or LinkedIn), post some information, and other people are able to see that information. Companies like IBD or CNBC post their analysis of the stock market (assembled or written by a specific person) and traders like you read or watch it.

So the original version of the internet is basically an ‘Internet of People.’

But lately the internet is being used to connect devices such as smart phones, smart homes, smart factories, smart hospitals, and more. Connections are being made between devices, or ‘things,’ without human intervention. This is what we mean by the Internet of Things.

The term ‘IoT device’ refers to anything connected to the IoT. This can range from complex robots to simple motion sensors.

The number of connect IoT devices is currently around 23 billion (in 2018). Growth is expected to be exponential, with a current prediction of 75 billion connected devices by 2025.

How Do IoT Devices Work?

IoT devices connect to other devices, get information from them, and make independent decisions.

For the communication part, IoT devices often don’t even need the internet. They can use Bluetooth or Wi-Fi to talk to each other.

For example, robots on a factory floor can carry products from point A to point B using local Wi-Fi.

You may have a printer in your office that’s triggered by your trading computer using Bluetooth.

What’s in the Way?

If you’ve been around technology for any time at all, you’ll understand the importance of communication standards. Perhaps you remember a time when PCs and Macs just couldn’t communicate…period.

The success of IoT will depend a lot on the development of IoT platforms that provide common tools and standards, allowing devices to communicate with one another.

One such tool is an interpreter that allows devices to ‘speak the same language.’ Another is a user interface app that allows humans to interact with the smart devices on the platform.

Major cloud service providers, like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure, have their own IoT platforms. Also, standards like Zigbee and Z-Wave are being developed with IoT in mind.

Why Use IoT?

Here are some of the benefits of IoT.


IoT helps automate tasks. For example, nurses monitor patients manually now. But IoT devices will be able to take over a lot of the manual duties. This will help nurses concentrate on tasks that require more human attention and empathy.

Better Performance

Repetitive tasks are boring for humans. They are also error-prone. Before IoT technology, automating complex repetitive tasks was quite hard.

But now IoT devices can take them over because they are capable of making complex decisions. These devices are less likely to make errors. So IoT helps improve performance.

For example, cameras are being used in factories to sense defects immediately so that issues can be resolved in seconds rather than hours.

Better Data Management

Human beings can’t process large amounts of data. Our memories have limits. IoT devices can take over these task where large data processing is part of the job.

For example, grocery stores can use IoT devices to keep track of merchandise on shelves and automatically order more. It’s a difficult, or at least time-consuming, task for human workers. But IoT devices can do it easily and pretty much instantaneously.

How Might a Trader Use IoT?

For many stock traders, their trading computers act as IoT devices once appropriate software has been installed. For example, our EZBreakouts Autotrader software will set trailing stops on your behalf as the prices of your holdings increase.

Commodity traders can use IoT devices like sensors and cameras to monitor commodity supply and demand.

If you trade out of a home office, IoT devices like cameras and sensors can allow you to lock doors remotely, monitor home security, control power consumption, and help maintain your lawn. All of these capabilities can potentially free you from distractions and thereby improve your trading performance.


Now that you understand the Internet of Things, be looking for ways you can use it to improve your business and your life.

There are more trading computer tips like this in our buyer’s guide. Check out our “How To Buy a Trading Computer” e-book.

Remember, we are here to help with all your technology-related questions. If you think of additional questions about computer hardware or other questions, give me a call. My team and I are here to help. We’re happy to answer any of your questions about trading computers via phone: 800-387-5250.

Photo by Gerd Altmann on pixabay.