Computers vs. Floor Traders -- Our Newest Heavyweight Trader Weighs In...

The days of the floor trader are coming to an end.

But this isn’t the death of the millions of dollars that can be gained and lost every single day. Instead, the ever-changing market is bringing a new opportunity directly to your doorstep.

I’ll explain in just a moment. First, let me take you back to a time before computers ruled the trading landscape…

In the mid-90’s, the Chicago Board of Trade had more millionaires per square foot than any place on earth.

But they weren’t just giving away cash in the pits, of course.

Nine out of ten locals who traded money for themselves blew up as the ultimate test of capitalism. Demand was high for big-dollar memberships for the right to fight, elbow to elbow, with the best traders in the world.

“I was there with them, personally elbowing for space in the Treasury Bond pits.” says our own resident trading veteran Alan Knuckman. “That was back in the heyday of the pits, when bonds actually paid substantial interest.

“Where I stood was hard fought territory. And for most traders it determined success or failure. Floor real estate was always location, location, location.”

But here’s something that most folks overlook when they think about the big markets and the floor traders in Chicago and New York, Knuckman explains…

The guys on the floor were not good traders, per se.

“Nerves of steel and amazing skills to sense price direction through the sounds and sights of the order flow, separated a few of the greats that could be called true traders. The rest had success because of floor dynamics,” Alan continues. “But when you look under the hood, most floor traders made money the same way: They profited from being able to buy at the bid price and sell at the ask price. Floor trading for locals back then was all about making money on the tick. In other words, traders could earn the spread between the bid and the ask, calculated in ticks.”

That means if you could buy low and sell high, you’d personally collect the difference. And, in the sea of colored jackets, proximity to an order filler from a big bank or brokerage house meant sizable paychecks.

For hundreds of years the order route was the same…

You called your broker with a buy or sell, the broker called a desk on the floor, a phone clerk wrote the request on a ticket, a runner “ran” the trade to the trading pit where a broker would execute the trade, an endorsed filled order card was grabbed by another runner and brought back to the desk, a phone call was made to your broker and they in turn called you with your confirmation.

But technology has changed everything.

“Travel agents, bank tellers, most brick-and-mortar stores, etc., have all been displaced by computers. The same goes for the trading floor,” Alan explains. “The floor guys had a skill that is not transferable to the click click world of online trading. Tens of thousands of sweaty, belligerent, almost all alpha males battled daily in a zero-sum game… winners or losers.”

Electronic markets have done away with the order filler and the corresponding locals in the pit to make things work. You don’t have to stand in the pit to trade anymore. Just a few clicks on a laptop does the trick.

That’s bad news for guys who used to make their living in the pits. But it’s great news for you as a Main Street investor.

The death of the floor traders means nobody has an advantage anymore.

“Big traders and small all have equal access to opportunity,” Alan says. “And in today’s digital marketplace, that means one thing — the potential to profit has never been greater… This is hands-down the best time in the history of markets for the little guy.”

You just need grab onto Knuckman’s two key ingredients to succeed…

[Editor’s note:My publisher just gave me the go-ahead to reveal the brand-new tool Alan developed that gives “Main Street” traders a chance to make $5,290…$10,200…and even $35,700…in seven days or less… over and over again! Click here for all the details.]

First, you need to know whatto trade (your favorite big ideas). Anybody and everybody can trade in any market anywhere anytime. Money never sleeps… It moves around the globe at lightning fast speed.

Second (and perhaps more importantly) you need to know what vehicle totrade it with.

“With today’s digital world and near-endless trading strategies, the importance of picking the right type of trade – stocks, bonds, options, currencies, and more – can make a huge difference in profit,” Alan concludes. “Do you want to make $31.25 or $31,250? Do you want to call an Uber on your way home or chauffer your Tesla?”

“Plan your trade and trade your plan” is the simple mantra that can lead to big paydays. And now, everyone has the chance to join the elite money club of past floor traders and big money market players.

The death of the floor trader means new life for the little guys…

Sincerely,

Greg Guenthner
for The Daily Reckoning

The Daily Reckoning