Electronic trading has changed the game. Before online retail brokers existed for anyone with a few bucks and an internet connection, the way shares changed hands came in the form of an Open Outcry. Basically, it was a method for traders on the exchange floor to “communicate” (yell and scream at each other), to buy and sell shares of an asset.

On these floors, like the NYSE, there were specialists, who were Market Makers facilitating markets for designated securities. They specialized in “their” stocks; they knew them inside and out and they made the rules.

Today, the NYSE calls these guys Designated Market Makers (DMM).

Exchange floors still exist, but the game has changed considerably; especially in the Market Maker game.

Despite the evolution of electronic trading, the Specialist mindset is widely used by many professional traders – it’s not just for market makers.

Think about, when you specialize in anything, it means it’s “your” thing. You know that “thing” inside and out. This goes for anything and everything in life.

Specializing in one specific thing means dedicating your time, resources, and efforts to becoming an expert in a particular area. By narrowing your focus in this way, you can achieve a deep level of knowledge and expertise that can be highly valuable in many ways.

One of the key benefits of specializing in one specific thing is that it allows you to become highly proficient in your area of expertise – in this case, trading a specific stock. You can develop a deep understanding of the company and how price moves, which can help you make more informed decisions.

Narrowing your focus can also help you achieve greater efficiency by trading one stock. By focusing on company, you can streamline your processes, eliminate unnecessary tasks (like scanning the market everyday), and optimize your workflow. This can lead to increased productivity and a more streamlined approach.

As it pertains to trading, specializing in a security gives a trader an edge when trading that security.

You can imagine trading the same security every single day; you begin to see the ‘right side’ of the chart – the unprinted chart. You can begin to ‘feel’ where price is going/rejecting based on areas of past interest. Of course, you can do this with any security, but the feeling will become much clearer when trading the same security day in and day out. You become intimate with it.

The luxury of being a specialist of a handful of securities is, you eliminate the daily scanning process required when trading the “hot stocks” of the day.

Of course, with technology the process can be quick to locate stocks of interest for you, however this process naturally adds another layer to your trading business – when it’s always advantageous to keep your trading business as simple as possible.

This style of trading only a small handful of securities each and every day, will cause you to miss moves that are happening based on intra-day fundamentals (breaking news), but you will have to be okay with it; and you should. Since moves in the market happen every day, when you compile a strong list of securities to specialize in, chances are one of them will be in-play during any given trading session.

This style isn’t for everyone. Patience is by far the biggest obstacle when trading this style and we all know how hard patience can be for many. There will be sessions where nothing is ready to trade out of your focused list, and this requires the trader to sit and be patient – basically not trade the session. Don’t forget, cash is a position.

That said, if you are the kind of personal with a more laser-like mindset and have the ability to patiently wait for one of your securities to come into play, then specializing in a small group of stocks to trade, may just be the answer to your trading career.

About The Street Trading

Consistently Profitable.

That's The Goal.

Start with a crystal-clear vision of where you’re headed, then effectively lay the foundation to reach that goal through a systematic process.

That's The Street Trading.

We provide a straight-forward, no-nonsense results-driven trading education, that cuts through the noise to teach new and existing traders on how the stock market truly operates.

Our attention is focused on building actionable knowledge about the markets from the ground up. We construct a foundation of the fundamentals behind consistently profitable trading that you can build a career on. Take the guess work out of trading and ultimately understand what moves the market to finally flow with the Street and Trade with Clarity.

Day Trading | Swing Trading | Position Trading - It all comes down to managing risk and market psychology.

If you’re interested in learning more about what we have to offer you as a trader, come check us out at www.thestreettrading.com

We look forward to joining you on your trading journey!