I just attended The International Traders Expo organized by the MoneyShow which brings together thousands of traders with a focus on learning trading strategies and sharing ideas. Here are some of the trends I observed in trading and technology.
Trading and Technology Trends:
- Social media is a powerful resource for insight. More than ever before, many traders are effectively leveraging Twitter, Facebook and other blogs to access relevant content and share ideas. There are many sources of information available now – some more relevant than others. Social is a particularly good indicator of sentiment, but beware confirmation bias (where you look to validate what you already think). Speakers at the “Visual Toolkit for Investing: The Rise of Charting in Social Media” noted that it is important to curate your content stream and to cultivate followers whose opinions and perspectives you value, but also which may differ from your own point of view.
- Trust and credibility are more important than ever. With all this content available, who should you believe? The downside to all these blogs and websites is that anyone can publish and it’s important to trust your source. Look for photos of real people and professional designations like the Market Technician’s Association which offers a Chartered Market Technician program to validate technical analysis.
- Compliance hurdles remain high. Having spent the last few years in FX, an OTC market, I forgot how onerous operating in highly regulated markets like equities and options can be in terms of approvals and getting new products to market. Someone from a leading online broker told me that downloading new apps requires 6 weeks of internal review and approval before going live, even for basic market news services. Apple’s messaging is not supported on work-mandated iPads because chats are not archived or trackable. Any vendors selling products into this space need to understand and navigate within this structured framework in order to be effective.
- Keeping up with the newest technology remains a challenge. The demand for ever faster, more timely data and lower cost services keeps increasing. Ensuring that you are offering what your customers want and need is essential, but it’s also critical to have your tools fully integrated so they work together easily and are user-friendly. There are so many choices for traders today and remaining relevant and innovative is important for garnering market share, particularly because many traders will switch for a better or cheaper alternative. In the new world of “internet everywhere”, technology will become embedded in everything we do and should be easily deployable and inter-operable.
- Loyalty has to be earned, not bought. There are many ways to keep customers, but the best is to give them multiple reasons to stay, whether that’s because you offer multiple services or your customer service or community are better than the other guys. Offering a low price or special introductory offer may get a customer to try you, but that doesn’t mean they’ll be sticking around for the long-term. With low switching costs, many traders like to spread the love around, but you need to give them a reason to want to go steady with you.
The conference provided an interesting take on what retail traders are looking for today and provided a lot of value because of the education and presentation-based format. Based on feedback from several vendors, attendance was down, likely because so much information is now available online and New York weather may have kept all but the most committed attendees away.
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