Tuesday, 10 May 2011

Time and Technology

Technology is great. We all have a different perception and way of using it that is particular to ourselves, especially those of us who have been around longer and have experienced the innovation since the Internet became mainstream, beginning in about 1993. At least that's when I first started using it. I didn't have my own account but had hired a programmer who was just out of university and he had Internet access that way. The new world had arrived.

I'm in London and bumped into one of the guys who ran the clearing firm that I last used before I came off the floor. He's no longer in clearing but in a hedge fund. Everyone finds their way differently as the markets evolved. The LIFFE market was a leader in clearing back in the 1980s as we cleared "live". Trades were matched on the floor within an hour of a trade. We didn't have the out trades that the guys in Chicago and New York had when their trades were only matched over night.

LIFFE had the first electronic trading system in the late 1980s, which was confined to after hours trading. It squandered the opportunity of this innovation becoming the market leader and allowed the German DTB to come in and own Europe.

Chart below shows a nice sequence from this morning's (London) trading. The trades were entered by Flo. You can see how easy it would be to better manage the exits than Flo did by Hybrid Trading. Stops were too far away and targets were too close. The context allowed me to better manage them than Flo did.

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