Old times. Good old times. Since I already arrived to that reputable age where hairs start to be white remembering the past is an exercise that can help the full understanding of the present. Do you remind when trading on line was still to come ? Trading was an endeavor completely different from now since the technical hindrances were so huge that almost nobody could afford it. The biggest problem for the European traders was that brokers were not so professional like in the USA and the only lucky exceptions were the London based brokers who were accepting orders in English by phone. But one thing for a not native speaker is to ask in English where is the closest bus stop and another thing is to place an order or to quarrel over a bad fill. Joe Ross in those times published a book with an audio cassettes course explaining how to place an order in the same way you can take today a recorder cassettes course in Russian, questions and replies, please repeat slowly, make your homework before turning to the next lesson and similar stuff. The second problem was the data feed: even the price for the subscription to an end of day Metastock data service amounted to many monthly salaries and imagine what happened for a real time data feed service. Every trader was armed with a satellite dish that it had to clean properly when snow was falling otherwise data were missing. A friend of mine got a serious wound in the head because during night he woke up, went to the balcony, cleaned the dish from the snow and then he slipped on the ice of the balcony. It was even a dangerous work in those times to be a private trader at home … Another nightmare was to lose the intraday data because of a power blackout or a computer crash. There was no data backup elsewhere and you had to interlace a friendship network in order to ask the lost data to your fellow traders. Trading could not be a lonely profession. Then data often were not accurate and you had to check and update by hand the daily opening and closing price. Trading then had to be tailored in relation to the fact that you could not place dozen of orders by phone and over all you could not handle them with a 5 minutes trailing stop, a dynamic target price, or scaling up and down the number of contracts. So even intraday trading systems had an unbelievable constraint: do not make more than 3 trades per day … And it was normal that brokers, maybe not the London based broker but the Italian, German or Swiss brokers, could protest if you had the incomprehensible idea to call more than 10 times per day. Once a broker told me: why do you want to place so many orders per day, sooner or later you will lose all your money all the same. Amazon was still to be invented and there were really few books about trading in French, German, or Italian. Internet was something you could read in the newspaper like the odd story of the day and not a widespread tool among traders. Information was expensive and the lion of the markets was sitting on your way to profits and it ready to eat yourself in just one mouthful. Barriers to the entry in the professional trading arena were high and you really had to be a brave climber to overcome all the obstacles. And if you remind those old times a question suddenly arises, a question that could hurt the pride of the today traders: in those old times it was easier than today to become a successful trader ? You need to specify what means “easier”. If easier means that the survivorship rate among beginners traders was higher in those times I can agree on this. If you were not serious about trading you would not even have thought about the idea of starting such a possibly frustrating business. Today to play with Nintendo or to place an order could seem the same ludic activity. But eventually I have no clear-cut definitive reply to that vital question. What I know is that every modern trader need to think that if it was possible to make money in those harsh conditions now with all the facilities we have at our disposal to make a pile on the markets is a moral imperative.
Emilio Tomasini is Chief Editor of the Italian edition of TRADERS’ MAGAZINE (www.traders-mag.it), the leading monthly publication in Europe for trading and investment, and since 1999 he organizes the TRADERS’ CUP the most important real money European trading competition (www.traders-cup.it). His personal weekly free newsletter L’Indipendente di Borsa (www.indipendentediborsa.it) is one of the most reputable Italian financial media and counts more than 100.000 readers. His website in English is www.emiliotomasini.com