I’ve spent a few weeks with the Bloomberg Professional platform at Bond University. I’ve also been reading Alex Preda’s sociological study Noise: Living and Trading in Electronic Finance (Chicago, IL: University of Chicago Press, 2017). Below are some trading diary notes on the differences between retail and professional traders:
Amateur / Retail Traders
- Able to submit bid or ask market orders or limit orders.
- News: company feed or Twitter sentiment data — herding.
- Trade Execution: tied to chosen broker who sells order flow.
- Order / Position Management: risk exposure, no post-trade analysis.
- Market Surveillance: focus on company / single asset classes.
- Trade Analytics: fundamental analysis, technical analysis which is ‘gamed’ by broker to encourage over-trading, and that is ‘gamed’ by HFT and Prop Trader algorithms.
Professional Traders
- Able to submit orders with different sides, types and strategies — as well as quantity, ticker, limits, brokers, and instructions. Able to access market depth for BuyStrikeBid, BuyStrikeAsk, SellStrikeBid, and SellStrikeAsk orders (dealing with the order book and market microstructure).
- News: alerts, company, market-moving, and sentiment.
- Trade Execution: broker choice, liquidity, and transaction cost analysis. Execution focus on: Open Auction, Bid, Mid, Ask, Closing Auction, Blocks, and Dark.
- Order / Position Management: firm positions, risk exposures, post-trade, and trade reconstruction.
- Market Surveillance: economic events, global macro, asset classes, exchanges, company events, central bank activity, trading signals.
- Trade Analytics: company and peer analysis, price and volume, market depth, broker volume and liquidity.