As we celebrated Father’s Day this past weekend, I began to think about how stock trading has changed over time. Market structure and trading activity is far different than a generation or two ago – and it will continue to evolve.
How stock trading has changed over time
My dad was a stock broker back in the 1960’s and 1970’s. It was very difficult time to make a decent living as a broker back then. ETF’s didn’t exist. Mutual funds were a rare find. Hardly anyone was doing technical analysis. The economy was moving towards higher interest rates with seemingly no point of return.
In those days, you traded stocks or bonds. Market pricing was inefficient. Trading volume was tiny compared to today, as there were far fewer traders. The NYSE and AMEX were the only games in town. Nobody bothered to trade overseas.
As we all know, technology allowed the markets to became large, robust and international. Everything is now intertwined.
Some TV commercials tout the 24-hour, 365-day trading environment. This certainly didn’t exist 50 years ago, and frankly, it’s not very practical. I don’t know anyone who can trade at such a relentless pace.
Can you adapt to what’s next?
Our success in stock trading or investing relies on our ability to change our style and tactics. Our goal is to assimilate technical signals, make necessary adjustments and win. Because information flows so quickly – and price action reacts just as fast – there is little time to think about next steps.
Just like Wayne Gretzky once said,
“I skate to where the puck is going to be, not where it has been.”
In today’s market, you need to anticipate, and get in front of, the next move.
Keep watching for changes. Adjust your stock trading style, strategy and tactics as necessary. You can survive and thrive when the markets evolve once again.