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Author: Editorial Team Ayondo
Published on: 04 November 2022

From the beginning until today - how stock exchange trading learned to walk

Perhaps the VOC share was even a hot tip once - even without chart technology or other buy signals. In any case, the share certificate of the United East India Company - the full name of the Dutch company - from 1603 is the first tradable share of modern times and is correspondingly popular among collectors. However, the company bosses at the time would never have imagined the rapid developments that the stock market would later take. This is quite a challenge for investors, as they are the ones who have to filter information in ever shorter periods of time and make decisions based on it. In the meantime, investors are supported by a variety of tools, some of which are automated. But this was not always the case. This article will show you the possibilities that existed for gaining knowledge and investing in general even before the sweeping triumph of the internet.

In the beginning there was the newspaper

Who today also misses it sometimes: opening the freshly printed newspaper in the morning and perhaps even getting a little black fingers from the printer's ink? In times of digitalisation of many areas of life, print products have been among the first to face fierce competition from their online counterparts, and not infrequently even had to give way altogether. Nevertheless, this does not detract from their far-reaching importance in the past. In the past, for example, it was the Handelsblatt or, especially for the English-speaking world, the Financial Times that provided eager (private) investors with the latest stock market information and share prices. Of course, by the time the data arrived on the breakfast table, it was at least a day old. However, it should be borne in mind that the clocks ticked differently back then. It was not a matter of minutes, let alone seconds or even milliseconds. What was important was to have a record of the latest developments on the markets in one's hands, which in turn served as a basis for one's own considerations. After all, even most bank advisors "only" had the venerable Börsen-Zeitung or the then popular chart books by Hoppenstedt as a source of information for their advisory discussions. The most common medium for reasonably up-to-date prices among private investors was BTX or, a little later, the teletext pages on the television.

The next steps

At some point, the stock market sections alone were no longer enough. The newspapers were therefore successively expanded by new offerings, here especially in the form of the up-and-coming stock market magazines. The pioneer was BÖRSE ONLINE, which appeared on newsstands for the first time in October 1987 - just at the time of the big stock market crash on Wall Street. It was not until 1994 that the magazine Bulle & Bär joined the ranks - at that time still on a monthly basis: Today much better known under the new name DER AKTIONÄR, which was used in 1996. With the hype on the Neuer Markt, things went from strength to strength: On 27 January 2000, the first issue of the print magazine DIE TELEBÖRSE appeared with the then presenter Friedhelm Busch on the cover. On 30 March 2000, FOCUS MONEY followed with Deutsche Telekom board member Ron Sommer and Robert T-ONLINE as the main characters. An issue of up to 250 pages - including a lot of advertising - was completely normal for those times. At that time, the 3sat stock market game - on Fridays at 9.45 pm with preachers like Egbert Prior, Gerd Weger or Bernd Förtsch - was a must on the hunt for the fast doubler. There was certainly no lack of lurid recommendations at that time. A development that can be seen as both a curse and a blessing for investors. On the one hand, it was now possible to keep up to date with the most important events on the markets in a more balanced way and also to take different points of view. On the other hand, however, and this point should not be forgotten, the number of questionable publications and hotlines also increased, the concrete benefit of which for investors can probably never really be fathomed. Suddenly, investors were faced with the previously unknown challenge of having to identify for themselves which news could be trusted and which information they preferred to steer clear of.

Further stages of the stock market revolution

Once the hurdle of selecting between serious and questionable sources had been cleared, a new form of information supply gradually set in. This time it was the stock exchange letter subscriptions that arrived regularly by post and were sometimes eagerly awaited by the recipients days in advance. Here they found the latest market analyses. Without the internet, which only came later, it was nevertheless difficult to independently verify the findings touted by various stock market letters. In a certain sense, one was dependent on the professionalism or the correctness and topicality of the information provided. If one finally liked a presented share or other security so much that one convinced oneself to buy it, some levers had to be set in motion first.
After all, you could not simply place an order online and from home with your trusted broker. Instead, it was necessary to do this either by fax or by telephone, which took time. Often, one also visited the advisor on site in the (bank) branch. Especially for traders who have to resort to enormously fast transactions, this procedure sounds almost outrageous and would of course be unthinkable for one's own trading strategy. Today, however, the absolute majority of all stock exchange transactions take place on the internet as a matter of course.

What has happened since then

With the successive onset of technical transformation, stock exchange transactions - as already mentioned - increasingly shifted to the virtual space from year to year. It was therefore a logical step that stock exchange letters soon no longer arrived by post, but were sent by e-mail. Later, the first signal services were added, which provided investors with the perhaps decisive ideas, impulses or even the confirmation of a previously matured investment decision at the right time.
Of course, the development of the markets did not suddenly stop at this point. Next came the publication of trading strategies that could be copied by anyone and everyone without further ado. Such model portfolios are still very popular today, although in practice one should look carefully at whom one is actually following.
The distribution channels and the consumption of information also changed in line with the technical possibilities and adapted to user behaviour. From e-mail to SMS, from instant messenger to push messages, from internet forums to social networks, from neartime to realtime - for every investor type, risk appetite, investment horizon and investment and holding period, it is now possible to precisely control how quickly (or not) one wants to react to market events, trends and developments.
The last and consequently current step with regard to the evolution of stock market trading is the largely automated execution of signals or buy and sell strategies. In a way, it is a further development of the previous point and follows on directly from it.

That remains to be noted

Not every development of the past years and decades may have pleased investors. Many things have become more hectic, which makes well-founded decisions much more difficult and can even lead to misjudgements. On the other hand, however, the information advantage that can be observed in many places, together with the resulting increased speed of reaction, should not be forgotten. All this is due to one thing above all - unstoppable innovation.

Risk notice:

Every financial commitment on the capital market offers opportunities, but is also associated with risks depending on the product features. As a rule, higher opportunities correspond to higher risks, which under certain circumstances can lead to a total loss. Only invest in financial products that you understand how they work and that fit your risk profile. On the other hand, avoid complex products or those that are associated with considerable risks. Only invest capital that you can afford to lose. Diversify your portfolio.