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down to business on time on their own, the trading room offers needed structure. |
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In addition, you are less likely to have technical problems using a trading firm's terminals. Even with a speedy cable modem in a home setting, for example, I have had it go out during trading sessions. Short of a major power failure, you will never have this kind of interruption in a trading room. |
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More common than modem failure is difficulty getting through fast enough to my online broker. But part of that difficulty is not being set up with a firm that is tailored for the fastest possible trading executions. Even with the fastest of the browser-based brokerages, using an online brokerage to execute trades is nowhere near as fast as the super-speedy direct executions you get using trading room systems. |
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Another benefit of the trading room is that the level of information available is going to be more than most traders will get using home software packages. For example, Level III information is included, showing the institutional traders and the prices they are paying to buy and sell to each other through Instinet and other electronic communication networks (ECNs). As well, you have three Level II screens running, allowing you to track three different stocks at the same time. At home, you are more likely to have only one Level II screen running, which for most, is adequate for the job. |
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In learning how to use the software and understand the various screens, the beginner is allowed to do simulated trading until he or she is comfortable enough to begin trading live with money on the line. However, as I argue here, once the novice trader is ready to trade live with money on the line, there is pressure by some firms to trade in larger share lots, which is too risky because of the amounts of capital that must be wagered. |
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Because you are going to have to pay $1000 to $2000 or more if you want to take the training course offered, it is not in the interest of those who manage the trading room to see new students quickly lose all of their capital and go away feeling angry, frustrated, and ripped off. |
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They are making money on your commissions, not on the money you lose. So it is in their interest to keep you at the computer making trades for as long as possible. Managers are quite patient in allowing new students the time to get used to the intimidation of the scene, the technical aspects of operating the hardware and software, and the anxiety of putting their money on the line. |
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