Believe it or not, in those far-off days, live share prices were quite a luxury for PIs, and I had always hitherto used a judicious mixture of the prices pages of the FT, Teletext prices (only updated every 2 hours in those days!), and furtive (while I was in the office) calls to Fidelity Stockbrokers’ Quote Line. Amazing though it may seem now, it was quite easy to make money on shares this way, and I really did have serious doubts about the cost of Market Eye – which in those days was virtually the only show in town for live prices. It was £1300 pa for Level 1 prices (Level 2 then being a rather kinky practice reserved exclusively for City hot shots), which seemed a lot of dosh at the time.

Anyway, I decided to spend – or as Gordon Brown would doubtless put it, “invest” – part of the proceeds of my final redundancy payout on a year’s subscription to Market Eye. The "black box" arrived in mid-December 1996.

And from then on, I was well and truly hooked on the share habit, and have never looked back.

This all sounds fearfully primitive I know, but in those days, the idea of being able to build custom pages of favourite shares, and be able to monitor them on a real-time basis, with a ticker showing all the price movements to boot, seemed unbelievable – quite pornographic in fact.

Ten years ago, online share-dealing was rare, to put it mildly; and recalling what standard share-dealing commissions were then makes me wonder how I ever made any money at all! For instance – and this was quite typical – Fidelity Brokerage charged a flat-rate £25 for deals up to £2500, £35 up to £3500, £50 up to £5000, £60 up to £6000, and ... er, well, in those days I never dared trade above £6000 because the costs were so great!

There was no spread-betting and no CFDs in those days, either. Nope, the opportunities for losing vast amounts of money were terrifyingly limited ;-)

The main way to "gear up" then was to buy shares on extended settlement, which of course can be still be done. I used to buy a lot of shares on T+20 – and sold quite a lot of those on T+19! Thanks to a helpful dealer at Fidelity, I quickly learned that it was smarter to trade on T+10 because most of those type of deals could be done electronically by the dealer while I was on the phone, together with price improvements; whereas all T+20 deals had to be phoned through to the market and one never got an improvement and even sometimes had to buy above the offer/sell below the bid.

I had discovered this mysterious thing called "Level 2" in 1994 when still at work. In those days, all shares – even FTSE-100 ones – were on SEAQ, and I had phoned for a quote on British Aerospace, which I was thinking about selling. The dealer had told me the price and, while I was dithering, suddenly said, "If you want to sell at this price, you’d better be quick – they’re all coming off the bid". Impressed by the note of urgency in his voice, I told him to sell, and when he had done so, asked him what he meant about this "coming off the bid" racket.

And he told me ;-)

And from that point onwards, until I got Level 2 a few years later, whenever I rang the broker for a price, I would always ask about how many market makers there were on the bid and offer. What a patient and tolerant bunch of people those dealers were!

Anyway, back to trading ... I began to really develop and refine my present style during 1997 and 1998: short-term trading based on small losses and big gains.

I discovered how to short shares in September 1998, when the FTSE fell sharply for a few weeks because of the collapse of a hedge fund called Long-Term Capital Management, and the Russian Government defaulting on their Government bonds. At that time, CFDs and spreadbetting were still largely unknown, and the only way I found it possible to go short was to open a specialist account with Durlacher stockbrokers, which enabled me to go short on extended settlement. Very few brokers offered this service; it had the disadvantage that, by definition, extended settlement was often not long enough – unlike with spreadbetting and CFDs, you had to close your position after a couple of weeks or so, rather than be able to run it on indefinitely with only modest roll-on charges.

In late 1999, I started spreadbetting, which was still in its infancy – for instance, in those days, most spreadbetting firms only allowed bets on the top 350 shares. (Actually, there weren’t many spreadbetting firms, period.)

That was lucky timing, because it enabled me to go heavily short of the market over the next couple of years, although (contrary to much modern mythology) it was also quite easy to make money on longs during much of 2000-2002, if one picked the right shares at the right time.

If you have managed to get this far, you may wonder if there were any advantages to trading ten years ago compared with today. Well, actually, there were ...

Because all shares were on SEAQ then, it was easier for a momentum trader like myself to punt successfully on the large, liquid stocks. There was far less intraday volatility, and you could often get a decent profit out of shares like Hanson, which tended to move up steadily, day after day, in benign market conditions. Those blue chip shares were wonderfully liquid, many having over 20 market makers apiece.

Secondly, and perhaps paradoxically, because there weren’t so many private investors/traders around in those days, it was actually easier to get fills without slippage. Getting through to the broker on the phone was far easier – just as well really, since that was the only way most of us could buy or sell ;-)

Thirdly, there were markedly fewer "market gurus" around to tell us that the market was tanking big time. And the market just about managed to bear up without them ;-)

And lastly, and most importantly from my point of view, there were a lot of really great trading shares around in those days, with tight spreads, good liquidity and decent trading ranges. I’m thinking particularly of the electricity and water shares like Northern Electric, SWEB, Seeboard, Southwest Water etc.; and TV and radio shares like Anglia TV, LWT, Yorkshire TV, Metro Radio and Chiltern Radio. Most of these were taken over in the mid- to late-90s and I sorely miss ‘em!

Overall, though, I firmly believe that the modern era’s advantages heavily outweigh the disadvantages. Quite apart from all the obvious advantages that the internet confers in terms of live prices, Level 2 and online dealing etc., the sheer amount of information available puts the PI on a much more level playing field vis-à-vis the City professional; and the bulletin boards, although sometimes less than useful in terms of informativeness, certainly provide a lot of (mostly) harmless entertainment ;-)

For more information check Diary of a Spreadbetter which documents my trading activities and performance from week to week, spreadbetting on stocks.