After 15 years as an analyst for Stocks and Options, I’ve seen trading transactions come full circle. From phone orders to Trading Platforms to smart device applications. During this time, there has been one key element that hasn’t changed – you need your view to be right! And now that a new age of trading facilitation is upon us, I see the inevitable end of the Trading Platform.
My very first trade was made over the phone to a full service stock broker. The company was Ord Minnett, and I had to be exactly precise in what I instructed him to do. As you can imagine, I was extremely nervous, gripped by fear of making a mistake. I wrote the order down, practiced reading it out to my colleagues, and then with sweaty palms, dialled the number.
I can’t remember the exact stock, it was one of the Fletcher companies listed on the New Zealand market. But I can remember the brokers reaction once I’d placed the order. “Is this your first trade?” Embarrassment set in.
Now, after more than 15 years trading professionally on behalf of clients, for broking firms, and personally, I couldn’t imagine how many trades I’ve actually made. How many millions of dollars in brokerage, how many wins, loses, breakevens, or how many gigabytes of data have transferred between me and the stock exchange computers. Imagine how much more in another 15 years!
The birth of the Trading Platform in Australia
The transition from Phone service only to Online broking happened very quickly. The first Trading Platform I saw for retail clients was in 2000, just when Sydney was about to host the Olympic games. The company was called eStar, and this Trading Platform is the grandfather to the IRESS system that stock brokers use directly with the stock exchange.
I thought it was amazing. The speed and ease at which I could place trades without having to call up my broker was a game changer. But at the same time, I had direct access to prices, charts and a plethora of other information. All at a very low cost compared to the other systems I needed such as Bloomberg terminal. The Trading Platform was born!
Compare this, however, to where stock market information had come from over the previous 100 years. Early 20th century stock exchanges sent information through Morse Code. There were ‘Chalkies’ who would write the prices up on a blackboard, ‘Runners’, typically young boys, who would run between the exchange and the Investment firm with the latest prices. And most information was disseminated through the Newspaper, where the skill of a good reporter would find out information that would be invaluable in making investment decisions.
The Trading Platform has revolutionized the average investors’ ability to buy and sell shares. This has only come around due to the advancements of the Internet, and after more than a decade of broadband access and lower stock market data fees, the Trading Platform can provide us with no more advancements. We can place trades, view data (fundamental or technical), establish price alerts, and even program trading systems into them. But the platform doesn’t make the trading decisions, and this is why I see the eventual demise of the Trading Platform.
The Trading Platform is Dead!
There will always be an element of traders who want to do things themselves. However, I have been around traders and investors long enough to know one plain fact; that no matter how much the investor thinks they want to know more information about how to invest successfully, the bottom line is they just want to make money!
This is why a trustworthy, consistent and informative Recommendation service will always trump a Trading Platform service. Results speak volumes, and more often than not, an uneducated trader who opens a trading platform in the hopes of making their fortune from the stock market, is going to give their hard earned money to those who approach the markets with a planned approach.
Australian Investment Education (AIE) identified this need, and by taking the latest technology and merging it with broking services, have developed the Trade Me service.
You no longer need to log into your Trading Platform to place trades that have been recommended to you from a trusted advisory service. The Trade Me service sends the recommendation to you via SMS and email, and all you have to do is Click on the trade, enter position size, and the trade will be placed by a licensed broker directly for you. Three clicks, and you can buy or sell recommendations that are managed in a Model Portfolio approach.
The future for trading for retail clients, that is the average Mum & Dad, is all about service. Professional advice, speed of communication, and ease of transaction, all at some of the cheapest brokerage costs in Australia. Trade Me is a revolution in service with clients placing orders whilst at work, in boardrooms, our in the fields of farms, or while sitting at home.
But the most exciting development is yet to be released. We are working on the Trade Me Application for Smart Devices, which will allow you to conduct your trades from anywhere in the world, at any time. The Recommendations will be pushed directly to you, providing more flexibility in how you receive notifications.
Matthew Brown – US Stocks & Options specialist
Halifax Investment Services
ASIC Australian Financial Services License Number – 225973
If you would like to learn more about the strategies you can use to profit from any type of market direction, visit www.australianinvestmenteducation.com.au or you can contact Matthew on firstname.lastname@example.org
Matthew is an Authorised Representative of Halifax Investment Services (Halifax). Halifax provides broker services, including Full Service and Discount Services using multiple trading platforms. For Discount platform services, Halifax charges the same fees for phone service as the online trading platform.