Online Market Trading

Have real-time stock charts and real-time quotes displayed on multiple monitors always been available for online trading? Was it always easy to track hundreds of stock and options symbols at the same time, in real time? Of course not. The entire world of online trading barely existed 15 years ago, and at that time it was almost entirely limited to professional stock traders. Brokerage platforms and websites delivering real-time streaming stock quotes and stock charts were simply not available yet for the average Joe.

Besides, it didn't really matter because the computer hardware available to the average person at the time was just not capable of running the types of modern trading applications that feature real-time stock quotes, real-time charts, real-time news, and the long list of "real-time" things that we have come to know and enjoy. So, how exactly did we get here?

We've Really Come A Long Way

While researching day trading computers, we recently came across this blast from the past. That article was written in January of 2000, almost exactly one decade ago. The recommended PC specs were a 500Mhz Pentium 3 (less than one year old at the time), 128MB of RAM, and Windows 98. As far as moving your data from one place to another, the only option was pretty much floppy disks for the average person. CD-Rom burners were available, but you probably did not have one yet unless you installed it yourself or were buying a brand new PC (and asking for the CD-RW upgrade). The USB datastick had not been invented yet and would not become common for another 5+ years.

The article also recommends a single or dual 17" monitor or even a 21" monitor. Today, the average size monitor is about 19 inches and 21" and larger sizes are very common. During the last decade, computer monitors have become much thinner and lighter, as well as a whole lot cheaper. That 21" monitor was probably about $2,000 at the time. Now they cost $200. In addition, computer monitors have also become much more sharp and clear, allowing applications to look a lot more detailed and polished than before. Also the operating systems, graphics cards, and graphics drivers have provided the ability to display such detailed information to larger and larger screens.

Most people were using the internet by then, but download speeds were measured in "k". 28k and 56k modems were pretty standard at the time. However, as the article warns, some cheaper computers still did not include a built-in modem so it was a good idea to double-check that before you bought. For the tech-savvy user, DSL and cable modems were available as well, offering speeds of about 1.5MB/sec (about what an I-Phone does now). However, these faster modems had not yet been adopted by a large percentage of the market yet so most people were still dealing with the speed and capability of a 56k dial-up connection.

So how did people do online trading at the time? Actually, most of them didn't. Here's a good example of how stocks were traded in the year 2000. Yes. That's intended for a fax machine. Although Charles Schwab and E-Trade and several other brokers did offer online trading at the time, it was out of reach for most people and understood by even fewer. The majority of people were still picking up the telephone to place each and every trade. During the spring of 2000, I can remember a lot of calls being placed from around my office cubicle at the time that our stock price was soaring. The person would be on the phone for 5-10 minutes just to sell 100 shares. And then, if they wanted to to sell more shares or cancel their order, they had to pick up the phone and call back again. On top of that, they were most likely paying around $24.95 for each sell order (remember when trades were $20+ per leg?).

Not everyone was still picking up the phone to make trades, however. Online brokerage services were already being used by a fair number of people at the time, especially professional traders and more tech-savvy non-professional traders (as well as regular tech-savvy people who invested in the stock market). The commissions were still high due to a lack of efficiency and competition within the industry, but the functionality to buy and sell stocks and options online using market and limit orders was in place and available. Then again, unless you were a professional market trader, your screen did not look anything like the modern, information rich platforms available today like Scottrade Elite, Power E-Trade Pro, ThinkOrSwim, Interactive Brokers, or MetaTrader. But, then again, we're talking about a 500MHz Pentium 3 with 128MB of RAM running on Windows 98.

The (More) Modern Computing Era

Today, the average tech-aware trader runs an advanced dual or quad-core processor such as those from Intel (Pentium Core 2 Duo, Core 2 Quad, and Corei3-7) and AMD (Athlon and Phenom). Backing up that processing power is typically several gigabytes of ultra-fast RAM , a 19" or larger monitor, and a 10MB broadband internet connection. Two monitors is fairly common now, and many traders use three or more monitors all hooked up to a single computer. It's also becoming more and more common for professional and even non-professional day traders to utilize multiple high-power computers at the same time, networked with a single mouse and keyboard. As far as software for stock market trading is concerned, the number of offerings seems almost limitless, from simple black-box type programs that just spit out names to buy and sell (buyer beware) to advanced mathematical stock market analysis tools such as VectorVest, TradeStation, and custom-developed software.

If you use an advanced platform, stock market data is delivered directly to your desktop in real-time. Multiple watchlists and stock charts are constantly updated, and the number of customizable icons and options has grown ten-fold. Now you can have multiple internet browser windows open at the same time and be paying your bills, ordering movie tickets, and watching a streaming CNBC video feed, and your computer probably doesn't even flinch. All this, and commissions for the active trader using online trading platforms are usually around $10 per leg.

It all seems so routine now because computer technology has progressed so quickly and from so many simultaneous directions. It's amazing to consider the enormous developments of the past decade and how they have affected our ability to communicate, learn, work, and play. And then to wonder, what will the next 10 years bring?

p.s. Despite being out of date regarding computers for day trading, the web site linked to above has some great information that is still relevant to disciplined stock market trading, including this excellent trading analysis worksheet. Click around and check it out a bit.