Know your customers and your competition

It almost seems so obvious that businesses should know who their customers are. In the real world, many small businesses can get to know their customers’ buying habits and taste, and they even might get to be on a first name basis with them. As companies get bigger, they don’t see customers per se, they see statistics about their customers, such as what gender they are, where they live, what kinds of products are they buying and at what times. Big or small, it pays to know who your customers are and what they want so that, as a great trader (read: middle man or middle woman), you can more effectively exchange your goods for your customer’s cash. An interesting ‘quirk’ of the stock market is that your customer can also be your competitor.

Even though knowing exactly who your customer is just as crucial for the do-it-yourself investor as it is for any other business, the reality of online trading makes this infinitely more challenging. Your “customers” are just numbers and letters on a screen. You have no idea on who they are or what their buying habits are. All you really see are share prices either rising or falling, and from there you can infer that there is either increasing interest in a stock or decreasing interest at any particular price on any given day. And as unsatisfying as that is, millions of people around the world base their stock trading decisions simply on what they are inferring from movements in stock prices. What separates the great traders from the rest of the herd is the understanding what their customers are looking for.

Check Also

Stumble

Investing Online Resource Center

Today I came across a great educational tool for individual investors curious about online investing.   …

Leave a Reply

Your email address will not be published. Required fields are marked *