DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Richard Estes who wrote (6720)	1/30/2000 5:38:00 PM
From: Tai Jin	Read Replies (1) of 18137

People can and will lose money in the stock market no matter how much money they have or how smart they think they are. This rule won't stop that. This rule is to encroach on the daytrader's freedom and to restrict their actions. Accept this one and the next one might hit you. As I stated earlier, this rule doesn't (and isn't intended to) protect those with lots of cash to burn. It doesn't even guarantee that traders with smaller accounts won't lose money. But I think it has the potential to reduce the risk to the new trader. The problem with a market like we have today is that it will attract many people because of the fabulous gains, and people are inherently greedy or looking for a way to quick riches. That's why lotteries are so popular (I don't like lotteries - I think of them as a stupidity tax). But most of these people are gambling, not trading. If you are in the market to gamble then you are going to lose. I believe this rule is intended to reduce the risk to the gamblers who play the market. I believe gamblers are more likely to use full margin. Someone who is just making ends meet probably shouldn't be buying lottery tickets, but he certainly shouldn't be gambling in the stock market either where he could lose a lot more money. Of course, the other side of the coin is the bona fide small trader. The small trader probably should be allowed to use margin. But we all have to trade within the rules. A good trader will adapt and be successful. But if we are such good traders then why are we complaining. After all, we're taking money away from the gamblers and bad traders. So we should welcome them, right? Don't get me wrong, I don't like regulations that have no good purpose. So far I don't really see anything wrong with this one, but perhaps the small/new trader should be asked for their opinion. If they want to raise the limit to $250k, that's fine with me. But there better be another way to short. ...tai

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