What surprised me the most is the number of individual traders who decided to leave their jobs to trade on their own.
Back In The Day With CompuTrac
Before there was TradeStation, before there was MetaStock and eSignal, there was CompuTrac, one of the first technical analysis software programs ever written for a personal computer. The software could process technical analysis on stocks, futures, and fixed-income products. Tim Slater, the founder of CompuTrac Inc., wanted to chart his stocks, but discovered he didn’t have the patience. He found someone who did — and even he was surprised at what happened after that. In 1979 CompuTrac the company built the first set of software to do technical analysis online, real-time, presaging the coming era of the individual trader.
In addition, Slater founded a series of conferences that were among the earliest to focus on trading and technical analysis and ground-breaking in its time, eventually holding them around the world, teaching traders the use of the CompuTrac software. Eventually, the company and its software were sold to Telerate, ushering in the era of computer technical analysis.
Stocks & Commodities Editor Jayanthi Gopalakrishnan and Staff Writer Bruce R. Faber spoke with Tim Slater, now retired and living in New Orleans, on January 24, 2011, via telephone.
Tim, how did you get interested in technical analysis?
It had to have been back when I was in graduate school. I had inherited a portfolio of securities, and I started tracking them. Because I am visually inclined, I began graphing them also. I started doing some technical analysis then, and began using the computer at school at night to grind up some figures. Along the way, I found out a Merrill Lynch analyst was working on technical analysis on the company’s mainframe at night when he could get to the computer. I was intrigued by that. That was my first impression of what computers could do.
That would have been when computers were bigger than the size of a Starbucks coffee shop these days.
About this time there was a programmable calculator called a TI-59, which had a little tiny card that you could put your formulas in. I was intrigued so I bought one, and I spent about a year working with it, and it wasn’t long before I was keeping about 100 charts to track my stocks. It would take three hours a night to post all of them. It was sort of hard to keep up.
The TI-59 wasn’t sophisticated enough for what you had in mind. So what did you do?
A friend called me out of the blue and said, “Tim, we are going to buy you a computer.” I said, “What for?” He said, “My wife won’t let me have one, and I know you’ll let me play with yours.” So I bought an Apple II. My rationale was that I was going to use it to keep my charts.
Is that what happened?
I tried to do some programming, but I didn’t enjoy it. I didn’t have a knack for it. So I went back to the computer store, and I was asking the owner some questions, one of which was, “Is there any way to map the cursor to know what the value of a point beneath that cursor was?” He told me no, that the Apple didn’t have enough horsepower to do that.
There was a kid standing behind me from Loyola University who overheard us, and he told me that he had a professor who had developed something he called a “Super Chip” that he used for character generation, and it probably had enough power to do what I wanted.
What did you do?
I went to Loyola and asked the professor, whose name was Jim Schmit, if he would do some programming for me, and he said yes. We hired a couple of extra programmers, very, very good programmers, all students at Loyola, and put them in the playroom of my house. They worked part-time at about $10 per hour or something. Within a two-year period we had 56 employees, 27 of whom were programmers.
By that time, I had formed a partnership with Jim and we called the company CompuTrac.