High Frequency Trading in Jobless Recovery

I'm on StockTwits

I follow an outstanding lineup of financial professionals and traders on Twitter. I learned about some of them through Stocktwits, which describes itself as “a social, stock microblogging service.” Stocktwits now offers a free desktop with more functionality than TweetDeck.

StockTwits is an open, community-powered idea and information service for investments. Users can eavesdrop on traders and investors, or contribute to the conversation and build their reputation as savvy market wizards. The service takes financial related data – using Twitter as the content production platform – and structures it by stock, user, reputation, etc.

While I’m not a trader or active investor, I enjoy the intelligent conversation of Stocktwits gurus like @aiki14 @Dasan @iron100 @ekanters @gregormacdonald @nelderini and others from around the world.  They’re quick to extrapolate from a world event to its effects on global economies, individual sectors and stocks.  (Note: follow Charlotte hometown favorite @kevinmhughes as he gains national notoriety).

Truckers and retirees now stock jockeys?

I thought my world view was skewed by my Stocktwits exposure to trading, where lots of folks new to trading and investing subscribe to the charts and advice of experts.  But then I saw an article on un-employed and un-retired people going into trading for the lack of other employment opportunities.   The next day The Daily Show ran a segment on the topic. Hmmm, something’s afoot.

I appreciate that there’s money to be made trading. But all the trading in the world doesn’t feed people, clean the environment or find a cure for cancer. And, as Samantha Bee points out in this piece, it’s not as easy as promoters would have us believe.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Cash Cow – High-Frequency Trading
Daily Show
Full Episodes
Political Humor Ron Paul Interview

Writing prompts for financial professionals

  • What tax considerations to high frequency traders & rookies overlook?
  • If you’re a financial advisor, how do you advise would-be traders to allocate their overall portfolio in consideration of high frequency trade risks and returns?
  • Review the different software products needed to pursue a career as a trader.
  • How long does it take and how much do you need to lose before you figure out whether this career is a good fit for you? What’s the total investment, considering hardware, software and mentoring services?

About Tamela M. Rich

From Charlotte, NC, Tamela writes books, articles, speeches and presentations for business professionals. From "the road" she writes about the people, places and experiences she discovers and the life lessons she learns from them. Invite her to share some of her lessons from the road at your next event!

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  1. I never liked high frequency trading… it will ruin the markets IMO… THANKS FOR MENTIONING ME! 🙂

  2. Dasan is first class all the way and I agree about his day trading comment. They all claim to make these fantastic trades, but even if it is true, pennies maybe a dollar. While I short-term trade in some aspects (from OPEX to OPEX) you need a longer-term horizon.

  3. I would caution people that short-term trading, aka “daytrading” is extremely difficult to do profitably. It works great in an upmarket, except that it misses a good portion of the up move. I still believe, after 20 years on the street, that picking good quality “superstar” stocks of world-class companies and letting your winners run is the best way to do it. (its not as fun as day-trading, though). It is NOT a coincidence that Warren Buffett, the world’s richest man, invests in stocks this way. Last time I looked at the Forbes list, I did not see a single day trader on it.

  4. Just want to clarify that short-term trading can be viable. I’m just not a big believer in “day-trading” which generally is defined as trading intra-day only, trying to make a few ticks, and being “flat” overnight. Short-term trading based on your knowledge of specific commodities, interest rates, or options makes a lot more sense to me. And I’ve noticed that successful people at it like A. Davian (who posts his trade results for all to see on his website) use a lot of risk controls, or option strategies. Just my thoughts – as always, I could be wrong.

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