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Hi,
This is based on an common traders question. Hope you enjoy it.
Alexi asked "Why do you emphasise service so much?"
The fact that the question can be asked in this or in a similar fashion by
so many clients suggests that this relates to an inner tendency that many
are unaware of.
Alexi (not her real name) is a very fast learner. Almost before you have
told her she is one step ahead of you. Her 'aha' skills are highly tuned,
so it was with some surprise that despite having read about service
concepts, there was no 'aha'.
So I asked her about the shopkeeper and the customer - who provides the
service, who seeks service and who adds to his/her buying price before
selling and who is happy to pay for service?
Well, she said, it was the shopkeeper, of course, who provides service and
gets paid, and the customer who seeks service and pays in profit to the
shopkeeper for satisfying customer demand.
"But so what?", cried Alexi - "what has this got to do with trading?"
Everything I replied - for example - who do you think pays slippage, the
seeker of service or the provider of service? You could almost hear the
'aha' over the internet - the email reply was within minutes - "so if I
provide service I get paid slippage instead of paying it for seeking
service? Instead of losing 1.5 points on average on each side, I get paid
1.5 points on average on each side of a trade?"
You have got it - and on your (rather extreme) figures that is 6 points a
round trip difference. If you provide either time shifting or price
shifting services to others they pay you instead of you having to pay the
service providers.
And like a shopkeeper, you have to enter into the spirit of service, which
requires up-front investment in cash-flow and usually repeatedly providing
service to make a profit, and the patience to be there when service is
demanded of you. Instead of controlling your entry and exit, you respond
to others urgency to trade by being there for them, over and over again.
For example, arbitrageurs shift related prices back in line to help service
seekers in either market to get a fair relative price for their trades
whenever they want to trade; market makers (stock accumulators/
distributors) help balance supply and demand over time and so facilitate
seekers of service to be able to trade when they want to trade.
Both get repeatedly well paid, for repeated service provided, to multiple
seekers of service - urgency is supported at a price - and you get to
determine the price!
Lessons Learnt
----------------------
Many people spend the vast majority of their lives seeking service, whether
going for instant gratification or looking for comfort zones to be
reinforced ...
So seekers of service spend much of their lives expecting to repeatedly pay
for the satisfaction of their desires and their urgency, and expect to
continue to do so, even when this awareness is at the unconscious level.
So is it surprising that many traders bring these inner tendencies to their
trading?
Only when brought to conscious awareness, can the trader decide to reverse
their normal behaviour and start to provide service to others, and reap the
rewards of provision of service.
It is like a scale falling from their eyes - or if you are uncharitable,
replacing selfishness with service to others.
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