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5 Ways RIA Traders Add Value to Their Portfolios

While some may say there is a distinct set of rules most successful traders follow, becoming successful as a trader also involves understanding less-controllable factors like risk and market trends.

According to Jean Folger at Investopedia, “One needs to understand the importance of and adhere to a set of rules that have guided all types of traders with a variety of trading account sizes.” Her Rule #3 is to use technology to your advantage, and that’s where we come in.

Rules for Successful Trading

In order to succeed in the markets, knowing how to respond to game-changing trends is key: by making the right moves, you can position your business for future growth and profitability. One of the rules most successful traders follow is to use technology to ensure trading rules and reporting compliance.

Becoming successful as a trader starts with a trading plan (which you can use technology to test, thus developing a methodology based on facts) and ends with keeping a good perspective – and knowing when to stop. Once you’ve got a proven fact-based trading plan, and implemented a stop loss, the rules for successful trading bear repeating in order to scale your business.

Scaling the business with efficient, repeatable processes is where technology is fundamental to consistently adding value, ensuring compliance, and analyzing costs.

As Jean Folger noted in the above mentioned article on rules most successful traders follow, trading is a competitive business, and having the technological competitive advantage is paramount to becoming successful as a trader.

Exiting all trades with a profit is simply not realistic, which is why limiting risk is one of the main rules for successful trading. No one can predict the stock market with 100% certainty, and especially in times of volatility, it’s important for registered investment advisor (RIA) traders to limit risk by having  a spread of investments to add value to portfolios. That’s another way you can use technology to your advantage, as it can help you determine what unique businesses are worth investment and execute block trades.

How RIA Traders Add Value to Portfolios

  • Algorithm Trading – Get the best price possible at the time of execution by utilizing broker “algos”.
  • Block Trading – Maintain high level compliance by block trading. This will ensure that all portfolios receive the same average price and a better execution price.
  • Transaction Cost Analysis – Analyze historical trades to ensure that favorable prices were obtained on past executions.
  • Consistent Executions across brokers – Ability to execute trades simultaneously across different brokers to ensure that portfolios at different custodians are receiving a fair price.
  • Trading Rules and Compliance – Ensure that individual client and firm-wide rules are adhered to by configuring trading restrictions.

By utilizing algorithm trading, block trading, transaction cost analysis, performing consistent executions, and ensuring trading rules and compliance – all which is done in BlazePortfolio® – you’ll increase efficiency while adding value for your clients and being well on your way to becoming successful as a trader.