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The phenomenon surrounding this new kind of investor has been called by many names: online investing, electronic trading, day trading, SOES trading, and plain, old gambling, just to name a few. More often than not, these epithets have been meant to be less than flattering. |
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The old-line brokerage firms, market making firms, mutual fund managers, financial advisors, business press, and a wide range of regulators, have all had their say about this explosion of electronic traders, and what they say has largely been negative. |
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But the deprecations, and the deprecators, totally miss the point. |
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The self-directed electronic investor is here to stay. This genie is out of the bottle and there is no way to get it back inside. Millions of people have felt the power of the Internet, and have tasted the exhilaration of being in control of their investments. |
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Some have lost money in their trading experiments, but many more are learning that successful trading is neither difficult to learn nor impossible to achieve. Even without prior skill or training in how to trade, many individuals intuitively sense what market professionals already know: trading is a skill that can be learned. |
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Figure 1.1 shows the steps to building a base of trading knowledge that will put you on the trading success cycle: knowledge breeds confidence; confidence breeds focus; focus breeds discipline; discipline produces great results; and, great results breed more confidence . . . and on and on. |
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This market forcethe force of self-directed, electronic tradingis becoming more powerful in the markets each day, with the promise of becoming perhaps the most powerful market force in the history of securities trading. |
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Like the five great market forces which preceded this one, the emergence of the electronic, self-directed investor deserves to be called by a name that recognizes its uniqueness, appreciates its importance, and which respects its power to shape the future. |
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Because this is the sixth great market force, we propose to call it: the Sixth Marketthe electronic trading of securities by the self-directed individual. |
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Think about it . . . the Sixth Market is you! |
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At this point, you are asking a great question: If this is going to be called the Sixth Market, what are the other five markets? |
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Let's begin at the beginning. On May 17, 1792, twenty-four stock brokers signed the Buttonwood Agreement to trade with one another beneath that famous tree, at what is now 68 Wall Street. |
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