The prevailing theme this year has been “change“. And not the unfulfilled promises made by Obama, but real changes in the trading community. And these changes are now being solidified by new policy implemented by futures trading exchanges.
On Monday, June 25th the Chicago Mercentile Exchange made a decision to change the way prices are settled in markets like corn and soybeans. This change brings to light a very real fact I’ve been talking about for a long time: Floor traders and old-school trading tactics are becoming obsolete.
In a last ditch effort to preserve the 150+ year old tradition, floor traders are going to battle with the CME to attempt to reverse the rule. If their efforts fail, then this will pretty much destroy the livelyhood and jobs of many floor traders.
The clip below from the movie “Floored” is a good example of how stubborn traders can be and why so many old-school pros are getting pushed out of the business.
With 65% or more of trading volume now executed by trading robots, the trading tactics that used to work even a few short years ago are now being eradicated. In this trading video series, I talk about why this is happening and some strategies that look to compete in the “new era of day trading“.
Here’s a video from my visit to the Chicago Board of Trade a few years ago. Notice the dead trading pits. Granted, it was a Friday afternoon before a holiday weekend, but it’s an eery view of what’s becoming of “in-person” trading.
No matter what happens with the CME’s ruling, one thing is certain – Technology will continue to change and dominate the financial markets, and those with the ability to adapt will have the best shot at success.