Who Is the New Stock Market Participant Surprise?

The Semi-Professional Trader

An unexpected new type of trader has emerged which is creating riptides within the professional community as a New Stock Market Participant surprise. The Professional Traders who comprise three groups consisting of the Proprietary Desk Traders for Sell Side Institutions, Floor Traders for Buy Side Institutions, and Independent Professional Traders who work for smaller firms or themselves have recently begun to notice a new kid on the block, one they never expected.

This new trader who trades similarly to the Professional Traders with lots classified as “large lots” and who has skills that impress is called the Stock Market “Semi-Professional Trader”.

Although Retail Stock Traders number in the millions and are one of the largest groups of traders in the market, they have long been ignored for nearly 20 years. Often, they are looked upon as “hobby traders” by the Professional Traders rather than as serious contenders in the market. The retail crowd was never taken seriously due to the lack of skill, dependence upon gimmicky trading systems, and news or other popular retail strategies. Until recently, most Retail Traders have had a dismal 40%–50% success rate and were happy with profits that barely covered expenses and did not provide any reasonable wage or salary for the effort.

The Professional Traders have started to notice a new breed of Retail Trader. They are gaining ground by trading with skillful savvy and challenging the Professional Traders at their own game, becoming a New Stock Market Participant surprise.

The Semi-Professional Trader is still a minority among the retail crowd, but their numbers are growing. A new generation of Retail Traders is learning how to trade like a Professional Trader, whereas the Retail Traders of prior decades never did.

These traders are classified not as Professional Traders but as Semi-Professional Traders because they are still hindered by:

  1. A lack of variables in orders and venues to choose to route orders. Professional Traders have trading platforms that offer a wide variety of stock order types and many venues to route orders. However, some professional platforms are now offering services to these Semi-Professional Traders, and a new breed of broker is emerging to fill their need. This will boost productivity for the Semi-Professional Traders and encourage more Retail Traders to join the ranks.
  2. Retail Brokerages are designed for Retail Traders who depend upon recommendations, news, and gurus to select their stocks. Most services are minimal at best and are specifically designed to discourage semi-professional-style individual stock analysis, which enables the Semi-Professional Trader to find stocks that offer far greater profitability. In other words, Retail Brokers have created broker services designed to keep the status quo for Retail Traders who earn just enough from trading not to give up, but never earn what Professional Traders make.

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Trade Wisely,

Martha Stokes CMT

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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