Veteran floor traders say open-outcry trading made it easy to spot patterns and read emotions. Electronic markets hid that information: large orders now stay invisible, making it much harder to predict moves and stay profitable.
I've been talking with a lot more senior traders now, a lot more veterans that traded on the floor, and they said when there was a floor, almost everybody that they started to train became profitable because it was easier to read emotions in the room. You can easily see the orders in the room. You could see people panicking. You could see people loading up on shorts as a high gets taken out. So it was easier to see the order flow. Know somebody that is consistently profitable and he's always shorting yesterday's highs, you're mostly likely gonna just hop on board. Exactly right. When everything switched to electronic trading, it became much harder. You can't really see the order flow. You can kind of anticipate anticipate it and try and feel it as much as you can, but you don't know if there's a guy that's waiting to place his 1,000 contract order that's gonna shake the markets.
