The financial markets and trading have undergone some incredible changes over the past decade. The growth and expansion of electronic trading has had a dramatic impact on the markets and has changed them forever. In the good old days stock trading was conducted in the open and was simple and straightforward: buyers and sellers got together on the exchange floor and made their deals. In 1998, the Securities and Exchange Commission authorized electronic exchanges to compete with marketplaces like the New York Stock Exchange. The stated intent was to open the markets up, so that anyone with a computer and a modest capital investment could have access to the markets.
However, as these new electronic marketplaces have grown and evolved, they have given large investors and traders a distinct advantage in the marketplace. The little guy even with the most advanced personal computer is light years behind the major players. It’s like someone on a scooter trying to compete with a supersonic jet. The scooter is always at an incredible disadvantage.
Unfortunately, Individual traders are in no position to compete with Wall Street’s powerful computers. These advanced computers use sophisticated algorithms or “algos” to execute million of trades in less time than it takes an individual to click a mouse. These algorithms are able to execute millions of orders in a fraction of a second and can scan dozens of public and private marketplaces all at the same time. They can process information and data at lightning speed, they can spot trends before other traders can even blink, they can modify orders and change strategies within milliseconds.
These machines don’t know fear or greed; they just simply know how to make money ahead of everybody else. Day traders who have been at this craft for some time will easily attest to the fact that it has become much harder for them to make money in the markets today.
Trading with a stop loss has become like walking around with a target on your back, even the best of trade entries go through multiple gyrations of loss and profit before any decent profit can be realized.
Day traders today more than ever before must approach the market differently, they must employ a structured and strategic approach to all of their trading. They must learn to understand the parameters that are used in developing the algorithms; they must learn to develop their own edge in trading against these machines.
At strategic trading we believe that the human mind will always triumph over machines, we are continually working on developing and teaching new trading strategies that can allow individual traders to compete in the dynamic financial markets.
We are determined to win the battle between man and machine.
