The Future of Trading is Team

The Future of Trading is Team

Boris Schlossberg

New York Times today reviewed the software that we use in our trading room and while the write up was mostly positive I think the article really did not do it justice. Slack, which was created by Stewart Butterfield, the founder of Flickr, is now worth 1.2 Billion after only a year of existence and is already making a million a month in revs.

I can just see some of you rolling your eyes at my Silicon Valley fanboy praise of yet another web based start up – but mark my words – Slack will be bigger than Microsoft one day. Certainly it is already a million times more useful than the bloatware that comes out of Redmond.

Although on the surface Slack may seem like an amped up version of AOL messenger, it is actually the first truly integrated global collaboration platform that allows anyone, anywhere to plug in engage with the world on an instant basis.

When it comes to trading forex – which is the most global capital market of all – the distributed nature of Slack has not only radically transformed how I do business, but more importantly has improved my trading by a factor of ten.

Most Americans who are brought up on the myth of the individual, the lone “creator” of wealth and prosperity, are utterly unaware that almost all advances in civilization have been the result of teamwork. No one ever accomplished anything in a vacuum and in real life (not Hollywood) a team of average people will beat a genius anytime. What makes Slack so powerful is that it allows for individual initiative while at the same time providing the user with constant collaborative feedback and support.

For anyone who has ever traded electronically in the isolated glow of computer monitors this can be a revolutionary change for the better. Trading strategy problems that used to take weeks to solve could be fixed in a day. Major tactical mistakes that would not become obvious for months, pop up to the surface in a matter of days. If you trade as a team your skills grow not arithmetically but geometrically.

I’ve mentioned before that some of the best traders in my room are making 1% day (today some of them banked 3%+), but I thought it might be interesting to share the words of someone far less experienced who just joined us a few weeks ago. Here is what she what she wrote in the room (sic.)

BIG Trades + News Trades +Day Trades $145 all in

“Hi Boris and Team, I find it hard to believe that despite being new, with not enough sleep, No EA, No Raw Spreads and all Manual trading…it’s still an 82% winning!…and that’s on VTs, NVTs during a PNPT day!…plus on a CADmania freaky Friday! Boy, I love trading. Boris and Team, thank you for your experties. Have a great week end.”

I could have never generated such results with any of my former students, using the standard “webinar/seminar” methods. In fact I hear it all the time in the room, that traders have learned more in a month there then they have in years, trading by themselves. More than ever I am becoming convinced that Team Trading is not just a fashionable millennial catch phrase – but is actually the future of our business.

Why Google Cars are the Future of Retail Trading

Boris Schlossberg Uncategorized

This week the New Yorker has a long essay on the the history and development of driverless cars. The writer spent months with Google engineers and various auto industry executives and the piece makes for a fascinating read. Although you walk away amazed at the power of the technology, the central thesis of the story is not that driverless cars are simply the next innovation in luxury, but rather that they are the next quantum leap in safety.

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Contrary to our intuition and grandiose sense of self worth, the computer is actually a much better driver than 99.99% of the general public. It doesn’t veer, it doesn’t fall asleep, it doesn’t drink, it doesn’t get bored and it doesn’t spill coffee all over its pants. In fact if public safety was the only factor, it would behoove us to legislate that all driving must be driverless by the next decade.

The driverless car is simply the next step in the integration of machines into our daily life. It is only jarring to our sense of self worth because it replaces a key activity that most of us perform every day. Yet if you think about it machines already correct our actions on daily basis in many spheres of life.

For example I am 50 years old and I still to this day cannot accurately spell the word “tomorrow”. Indeed I can barely spell every third word I type, but with google autocorrect no one is the wiser and instead of looking like the writings of a 10 year old with ADD, my research is quoted daily across the globe.

Certainly you can make the case that but ignoring the spelling conventions of the English language I am a lazy good for nothing slacker that should spend a semester in a high school remedial grammar class. But the truth of the matter is that few us can attain a Spartan sense of discipline, but many of us can achieve near Platonic levels of wisdom with the aid of technology.

Which brings me to trading. The world of retail trading is changing rapidly as algorithms continue to dominate flows in almost every market. When it comes to FX, the MT4 platform is the overwhelming choice for automated trading for the vast majority of retail clients. And there is a good reason for that. The MT4 allows you to program many repetitive, tiresome tasks that are often the difference between winning and losing.

Indeed according to some industry literature MT4 traders have a lifespan that is 5 times as long as point and click manual traders and they tend to perform up to 6 times better than screen based traders. None of this should be a surprise. The two main reasons why algo accounts do so much better is because computers don’t pull stops and they don’t add to losing trades. Indeed ever since I’ve moved all my trading to algorithms I haven’t blow up a single account. That certainly doesn’t mean I haven’t had losses, but in each every case the losses have been contained to the parameters of my trading plan – and isn’t that progress enough?