This content is a part of blog series from Steve O'Hare reflecting on lessons learned over a 30-year trading career and insights for the next generation of traders to heed.
If my son is going to keep his full, lush head of hair then he needs to take some advice from his old man.
Like many zoomers (Generation Z’ers), my offspring are true digital natives having grown up with access to the internet and portable digital technology from a young age. But this doesn’t mean they’re digitally literate and this can lead to problems when they’re exposed to fake or unregulated news, targeted by smart ads and exposed to content that requires a degree of life experience to truly understand. If they’re dabbling in trading then they need to be savvy to the marketing techniques that are springing up all around the trading world.
When I began my career, it was with people, real human interaction. I had the opportunity to watch, listen and pick up on behaviours and the nuances of non-verbal communication in the pit. It was hands-on, high pace and very active. For this generation of aspiring traders their senses are dumbed down by technological developments. All of their focus is on the data and signals that they receive through their monitoring devices. When they look for advice, it’s not over a coffee or in the loo it’s in a chat box. Although this obviously has its advantages of speed, collaboration and clarity they’re missing out on the depth of experience that peers provide. They’re also having to scrutinise the information that they receive and make fast judgments on its validity without having a real qualified sounding board present.
Why is this cause for concern? In recent years, and directly as a result of the global pandemic we have seen a significant uptick in the number of people dipping their toes in the trading world. Whereas in previous years trading was a dark art pursued by wolves who lived on Wall Street, now, rose-pruning Fred next door could easily be a bitcoin trader too. According to Charles Schwab 15% of current retail investors began playing the market in 2020, with JMP Securities citing 10 million new clients in 2020 and over 7.8 million new retail clients in Jan & Feb 2021. As a result, the industry is playing catch up in terms of regulation and due diligence. Our industry needs to move fast to ensure we’re looking after inexperienced traders who could be ploughing life savings or business assets into new exciting trading opportunities like green bitcoin or NFT’s.
As a company, Signal Centre decided early on to go down the route of securing FCA accreditation, similarly, I’ve invested time in securing a Technical Analysis Diploma from the Society of Technical Analysts (STA) and a certificate in Global Financial Compliance from the
Chartered Institute for Securities and Investment (CISI). This isn’t because I want a plethora of framed certificates on my wall, it’s because it’s the right thing to do. I want to be sure that the advice I’m sharing with clients is compliant, insightful and as accurate as it can be. We all have a moral responsibility to safeguard the financial industry against catastrophic crashes and economic uncertainty. This all seems very doom and gloom, especially if it’s falling on the ears of a twenty-something who is indestructible, ready to take on the world and make his fortune. But it’s an imperative lesson to share with the next generation and the people who are starting out on their trading careers. We need to keep pushing for industry regulation and continue to educate trading newcomers about what to look for in the signals and trading tips that they are accessing.
My son wants to trade, the apple really hasn’t fallen far from the tree, but I want him to embark on his trading journey as well-equipped as he can be and I want him to always be asking these questions:
- Who is telling me this information?
- Why are they telling me this information?
- Who are they regulated by? Is it a registered and well-respected body?
- Is there a disclaimer and risk warning?
- Is this information too good to be true?
- Where can I go for independent advice?
Trading carries a high level of risk to your capital. Losses can exceed deposits. Please read the full risk warning here.Trading spot foreign exchange and futures on margin carries a high level of risk and may not be suitable for all investors. You may lose all your capital. Loses can exceed deposits. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. If you are in any doubt about investment or the mechanics of such products, you should seek independent financial advice
Editors’ Picks
EUR/USD holds lower ground near 1.1850 ahead of EU/ US data
EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.
GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus
GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.
USD/JPY rebounds above 153.00 ahead of US inflation data
USD/JPY stages a comeback and regains 153.00 in the Asian session, snapping a four-day losing streak amid some repositioning ahead of the US CPI report. However, expectations that Japan's PM Sanae Takaichi could be more fiscally responsible, along with bets that the BoJ will stick to its policy normalization path and the risk-off mood, could support the safe-haven Japanese Yen, capping the pair's upside.
Editors’ Picks
EUR/USD holds lower ground near 1.1850 ahead of EU/ US data
EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.
GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus
GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.
Gold trims intraday gains to $5,000 as US inflation data loom
Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.
US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed
The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.
A tale of two labour markets: Headline strength masks underlying weakness
Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.
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