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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Tai Jin who wrote (7962)	4/23/2000 2:32:00 PM
From: Dan Duchardt	Respond to of 18137

Tai, A zero-sum market assumes that there is no net inflow/outflow of money into/from the market. I don't think that quite covers it. If we take "the market" to mean all the equities offered for sale, that is not static. Every day we have new issues added by IPOs and other offerings. If new money flows into the market, but only in sufficient quantity to cover the cost of new issues, in my view that would still be be a zero-sum market. It is the excess money that is willing to pay a higher price for existing issues than was paid in the past that makes the market net positive, or the money that is willing to flee the market selling at a lower price that makes it net negative. Over time, we have seen an average increase in the price of existing securities, as measured by any of the major indexes, making the market net positive in spite of periods of time where it clearly has gone the other way. Dan

To: Tai Jin who wrote (7962)	4/23/2000 2:34:00 PM
From: Dominick	Respond to of 18137

Tai Jin: Commodities are a zero-sum market. Someone must write, (sell), a contract in order for someone to purchase it. A gain for one party is an immediate loss for the opposing party. Dominick

To: Tai Jin who wrote (7962)	9/3/2000 2:38:52 PM
From: Robert Graham	Read Replies (1) \| Respond to of 18137

Clearly, in a market where stocks only go up then everyone makes money and no one loses. But in a market where stocks can go down then some people will definitely lose money. You are thinking in pretty much one direction with this broad generalization. For every buyer, there is a seller. So is everyone actually making money? And have you considered the MMs role in this? A zero-sum market assumes that there is no net inflow/outflow of money into/from the market. This can be true with a stock that is primarily traded by day traders who end up even with no positions at the end of the day. Furthermore, markets can behave like they are "zero sum" even when they are not actually "zero sum". This IMO is the more relevant point. This is where the same type of trader, like a scalper in a stock, is competing against each other. I think this is particularly in the smaller time frames. And in the case of the scalper, they are also competng against the market maker. Here it has been my experience that most of the profits end up going to the minority. Or looked at another way, when day trading over a period of time, the profits many traders make end up being taken away from them when the market changes, like from intraday trends to congestion trading. This can happen in the same day. So from that individual traders perspective, this would be considered a "zero sum" game. In a bull market, money is flowing into the markets and most people are making money but some people will still lose money. Everyone is making money from whom? Or is money being generated like that from a printing press when this happens? So everyone including the MM is making money? In a bear market, money is flowing out of the markets and many people are losing money, but some people will make money. So you do recognize the difference between real and paper profits. Eh? And the difference between profits on particular trades and the net profit over a period of time? :-) Have you day traded before? Scalped or swing traded? What time frame do you operate in? Or what is your average hold time? What instruments have you traded? The S&P Futures? Do you trade momentum stocks? Do you trade retracement patterns like flags? I am just curious. I find it puzzling how you lump everything in together with your broad generalized statements when the market is not homogeneous. Bob Graham