Friday, 16 December 2016

A Workman and His Tools

There's really only one constant in trading and that's Order Flow.

With the advent of personal computers in about 1979, markets began a series of changes. My Apple II was great in 1980 using CompuTrac software to provide daily technical analysis. This then went to Intraday analysis using the same but evolved CompuTrac software.

The tools became more sophisticated as PCs got better. The next big thing was 1993 when the internet opened up to private individuals. This coincided with Microsoft Windows appearing. This brought a host of software tools to help traders.

PC, software and the internet all improved and then markets went electronic. I left the floor in about 1991 and traded off a DTB terminal for a while until software appeared that made trading from home possible. This is when algos started making their appearance in a bigger way.

Today there are people that are estimating that algos are somewhere between 80% and 90% of the market.

Without updating the tools, traders don't have a chance against the algos. We need to use tools to both disclose order flow, analyze it and then semi-automate the execution. I'll write more about this in subsequent posts.

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