The Wire: New offering from Global Trader

I was just forwarded the following announcement from Global Trader and I thought it was quite an interesting idea for day traders / investors. Anybody tried it out? Thoughts?

You can check out the offering here.

The Wire. A Christmas gift worth waiting for

By Charles Savage, CEO of Global Trader

I don’t remember exactly when I first white boarded my vision for Global Traders’ online community offering but it was sometime in 2007. I clearly remember the enthusiasm and excitement with which the IT and marketing teams met my idea, excitement more about the fact that the CEO had finally lost his mind and had nothing to do with my idea at all.

Two Chief Technology Officers later and the work of people best described as wizards, magicians and conjurers and we launched version one of The Wire. The Wire is the name for the new online world we have created and is the centre of our financial community and the platform from which all our community driven services come to life.

It is a closed community in the sense that it is available to our live trading clients only but, beyond this, the restrictions fall away swiftly. The Wire is free to air and it is a radical new approach to delivering meaningful, actionable financial information that enables collaboration and communication and breaks down the barriers between those that trade and those that should trade.

At Global Trader we make it our business to smash down these barriers because we believe that for too long financial markets have unjustifiably been shrouded in mystery and intrigue. It is seen as the realm of engineers, actuaries and rocket scientists that, for the most part, have discouraged you from doing it yourself. To quote Peter Lynch, one of the most successful Wall Street investors of all time, “everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” The truth is that Global Trader has now made trading simple.

On The Wire you can call yourself whatever you like, talk to traders, publish your research and views, read blogs about investing, technology trends affecting trading and read about how we view the world of investing. You can live vicariously through your trading alias and learn from fellow traders. When it comes to the what, when and how successfully you trade The Wire is an open book.

Do you remember your first casino experience? I do and I’m pretty sure it went something like this. You wondered around the casino halls in awe of the sounds, light and music, stopping occasionally to peer over the shoulder of the confident punters taking up the seats at the machines and tables. You paused and looked on in wonder at the piles of chips in front of some of the players and, after plucking up enough courage, reached forward and placed your chips behind one of them. You won some and you lost some but you learnt from every hand and grew in confidence until finally a seat became free and you pounced on it.

With The Wire’s Twades you can stand behind real live traders, follow their trades, track their success and if you like even put your money behind their portfolio punts until you feel comfortable enough to join them at the table. If you’ve played enough Blackjack, as I have, you will know that it is always good to cover a couple of boxes. Twades is our “first flight” service to launch on The Wire with more first flight services lined up for 2011.

Then there’s She–Ra, my personal favourite financial blogger, who publishes her work on The Wire’s Skirt Length Theory blog. If there is still some youth about you then you are going to love her approach to financial markets. She says of the myth surrounding trading, “Do you see images of a high risk, fast paced environment populated by coked up investment w*nkers or images of old fogies that have made their millions sitting in silk slippers barking orders at their brokers whilst smoking a pipe? If so then you would be only the tiniest bit right and you would also be SO wrong!”

I have no doubt that the launch of the Wire will be reflected on in Global Traders’ history as the defining moment that best demonstrated our commitment to the vision to boldly go where no South African financial service provider has even dared to dream about. Welcome to the New World!

Insider trading just got trumped by Twades! The question is, were you following?

Day Trading is for suckers

There is a really interesting piece on the Business Insider website written by Henry Blodget which talks about why day traders can never win.

You can read the full article here but here for me was a key quote which needs to be borne in mind:

Most Wall Street traders have skills, information, and tools that day-traders can only dream of. Trading is a zero-sum game: Market moves aside, every dollar won by one trader comes out of the pocket of another trader. Day traders competing against Wall Streeters is the equivalent of a college football team (or Pee Wee team, depending on the day-trader's skill) competing against a pro team. Is it possible to win? Yes. But it's highly unlikely (1 in 100). Wall Street's winnings do have to come from somewhere, though, so Wall Street thanks the day traders for playing.

Blodget's conclusion is right - if you are planning to day trade your way to enormous wealth then think again - you're probably chasing a pie in the sky dream....

That's probably not what you want to hear if you are visiting a day-traders blog but let's cut the bullshit - making trading wealth is incredibly hard.

Part of the problem I think is that too many private day traders want to cast themselves as institutional traders.

• They sit with multiple screens and charting systems open. They want to talk about resistance, break-outs and the double nipple formation.
  
• They feel they have to be "in" or "on" the market the whole time
  
• If they are not moving money they are not really "trading"

If you are planning to get rich quick then go-ahead and trade forex through one of the online platforms with 200 times gearing. 90 out of 100 of you are going to get fried, maybe 5 of you will eke out a living you're probably going to give most of it back and statistically one of you might make one or two big scores and walk away before you give it all back.

If you do believe you have what it takes then consider these steps:

• There is nothing wrong with buying a reliable share portfolio which includes dividend paying, cash generative shares with high returns on equity - profiting from gains made here is just as much "day-trading" as trading in and out of the global currency market every 10 minutes.
  
• If you are going to trade regularly identify one or two core themes and run with them. Don't try and chase every market and every instrument because that is what the news is doing.
• The trend is your friend. It is the oldest trading mantra and for good reason. We all want to call "the top" or "the bottom" of a market but you will go broke going against the trend.
  
• Use a bit of common sense - trading is made out to be more complicated than it really has to be. Buy low - sell high does not mean buying a stock or currency now because it was 1% lower than it was yesterday
• If you are waking up in a cold sweat at two in the morning and rushing to check your portfolio or positions then you are over-commited.
  

I hope that gives you something to ponder?