How Traders Can Utilize
Web Logs (Blogs)
Web logs or "blogs" have become all
the rage on the Internet during the last couple of
years. Movie stars, politicians, pundits, journalists
and everyday folks are creating blogs. So it is no
surprise that traders and analysts are now using blogs
to communicate with their customers more effectively.
A blog is nothing more than an
on-line journal created by an individual (called a "blogger")
– a diary of one person’s market thoughts or a
collection of a variety of items that the blogger thinks
are relevant. A blog is usually updated frequently,
sometimes several times a day. Whereas a web site like
www.TradingEducation.com provides primarily
one-way communication from the originator to a viewer, a
blog not only presents the blogger’s personal
expressions but also gives readers an opportunity to
respond.
In the past there were news groups,
chat rooms, personal home pages and, of course, the
ubiquitous e-mail messages that have become a primary
means of communication in the corporate world. In an age
of MySpace.com, instant messaging and Blackberries, it
was only a matter of time before traders and analysts
adopted blogs as the newest method of getting key
information to their clients as quickly and efficiently
as possible.
For perspective, when I broke into
the futures industry more than 20 years ago, the
Internet was not available to the public, and the word "blog"
would likely have been considered just a misspelling of
the star monster in a grade B horror flick: The Blob.
The fastest form of news/analysis dissemination back
then was via a news wire service, whose customers had a
hard-copy printer or teletype that received information
via satellite transmission or telephone line. Although
that was seemingly rapid communication 20 years ago, it
cannot compare with the speed at which Internet and blog
information travels around the globe today. This is very
good news for the individual trader.
In fact, a veteran futures trader
told me 20 years ago that market-moving information
flowed right from the trading pits, from "in-the-know"
traders, out to the general investing public. Nowadays,
with the rapid rate of information dissemination via the
Internet, market-moving news flows from computer screens
into the trading pits – for those markets still traded
via open-outcry.
Trader’s Tip:
“Blogs can be a great venue for getting relevant and
timely market information and can help improve your
trading results.” – Darrell Jobman, editor-in-chief for
www.TradingEducation.com
Indeed, the Internet has leveled the
playing field for the individual trader seeking market
information and analysis, and blogs have only made the
flow of important market information and analysis even
faster and more effective for individual traders. And
traders know that "time is money" in this business.
In addition to the extreme timeliness
that blogs provide to individual traders, they also
allow the blogger to expound and provide key perspective
and opinion on events that are impacting markets.
In fact, a number of bloggers
use pen names and remain anonymous, allowing analysts
who are public figures to share personal thoughts or
feelings about the market without the name attribution.
This allows them to be more blunt and frank about their
real market feelings. One such example is
www.MysteryTraderBlog.com, whose author’s trading
credibility is well-established but who prefers to keep
his identity secret as he reveals his insights.
Veteran traders know the importance of what
analysts are "thinking" about market price action. This
is a common comment from an experienced trader: "I
already know the statistics in the markets. But what I
really need to know are the opinions of the market
experts." This is the beauty of blogs, as they allow the
expert trader/analyst the perfect platform to provide
their analysis and opinions . . . and in a very timely
manner.
Some estimates put the total number
of blogs at more than 50 million with virtually every
trading subject covered by a blog somewhere. The
challenge is to find a blog that suits you among the
many available. Perhaps the best way to discover a blog
that provides the best information for you is to go to a
site that has a directory of blogs such as
www.TraderBlogs.com.
Many of the features to look for in a
good trading blog are the same things you want in a good
web site:
Timely information updated
constantly. Just as with a good web site, an
effective blog should have current, fresh content that
brings readers back every day. It may be the latest
market view from experts with a long trading background
such as the one Dick Diamond offers at
www.indextraderblog.com. Nothing will kill
interest in a blog more quickly than stale news or data
that is updated only occasionally.
Fresh, distinctive views.
Print and broadcast media offer the standard line of
thinking that is widely disseminated and well known to
traders. Blogs provide an opportunity for bloggers to
present unique opinions or conclusions that may not be
in the mainstream of market thinking. These comments do
not necessarily have to be off the wall or illogical but
give bloggers a chance to express ideas that may be new
to traders and make them think beyond conclusions that
may be obvious. If the blogger’s comments draw a
response, so much the better for becoming a distinctive,
must-check site.
Personalized style. Not every
comment or opinion has to be witty or pithy, but it
helps if a blog has clever commentary mixed with humor
or personal observations. The best blogs have short,
insightful, interesting items and will be judged on the
quality of their content, not the quantity. You may see
some of the same information elsewhere, but a blog that
draws traders is one that has some twists – some
distinct characteristics that make it different than the
standard means of communication such as the commentary
about market psychology from an international leader
among professional trading coaches, Van Tharp, at
www.smarttraderblog.com. The more traders a blog
attracts, the more likely it will elicit reactions that
can help to educate the community of traders, including
the blogger, which is the purpose of a blog and what
makes blogs so useful and valuable to traders.
