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Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?! -- Ignore unavailable to you. Want to Upgrade?

To: jebj who wrote (477)	1/30/1999 2:22:00 PM
From: peter gucker	Read Replies (1) \| Respond to of 611

As I stated before, if the market is increasing more that the amount needed to cover the commissions, there is no way it can be "zero sum".>>>>> I guess you would have to do a study from when the first share of the first company ever to be traded was, in order to be accurate. I would also think that you would have to wait until all the stockmarkets close forever at zero in order to have the correct data.

To: jebj who wrote (477)	1/30/1999 2:44:00 PM
From: kaz	Read Replies (4) \| Respond to of 611

jebj, I never said it was "zero" sum. If the market only consisted of "A", "B" and "C" then I would agree with you. You are forgetting that in order for xyz to go from 20 to 50, lots and lots of people are putting their money into it. They're not just buyers adding value to the stock. They're also sellers and shorts who are LOSING big time as the stock goes against them. Then, to top it all off, commissions siphon off some of the winnings and add to the loss. Slippage is rarely mentioned, but just who do you think is paying for the market makers, floor traders, bonuses, mistresses, Porches, etc.? They're not doing it for kicks. You're trying to disassociate yourself from the market, as if that could be done. The price of a stock does not exist in some etherland. At least two parties have put their money into it for the price to exist. It is possible for the price to go up and both buyer and seller lose. How? Commissions and slippage. They're the equivalent of lung cancer to the cigarette industry. They need more and more people to start smoking just to break even! As you can see, more people can take up the habit and there could still be a net loss. I'm really amazed at how hard this is for people to grasp. Why would anyone put their money in the markets? Denial. And hope. All the individuals who come on these threads to brag, "I just made $5000 today, $20,000 last week and I don't see it ever changing," let us know how you're doing this time next year, if you're still here. The chances are overwhelming you won't be. Those who are, well, if they really are being honest, then they're part of that slim percentage who can adjust to market changes and keep their discipline. But those who are disciplined do not brag about their winnings and they don't curse their losses. Why? Because that is the definition of EMOTIONAL TRADING. Sooner or later it catches up with you. I hope you're all big enough to let us know when it happens. Then you might begin to understand what negative sum really means. It means you. Once you understand this you can pick the trades that have the lowest risk/profit potential. That's the only way to survive OVER TIME, and even then you have to be extraordinary in your self-control. It means you have to fight your human urges and trade rationally and without any emotion. How many people can really do that? Positive sum game... Then anyone who is losing money MUST be a moron since, over time, you can't lose in a positive sum situation. I vehemently disagree with anyone who asserts that the market is anything other than negative sum. It's flipping a three sided coin and you can only choose heads or tails. Over time, you're going to lose. Those who don't have found a way to stay out of the market until the probabilities are in their favor (like after a string of that "third head" coming up). The one advantage daytraders have is the ability to not trade every day. Institutional traders must trade regardless of market conditions. If you trade like them, you're going to lose fast. Your pockets just can't compete with theirs. If you wait until conditions are just right, you might make some money overall. In the meantime, tons of losers will have given lots of money so that you can sell higher than you bought. That so many disagree with this simple statement suggests that they haven't put their money in on a consistent basis, if at all. If making money was so easy, why would managers who return 25% PER YEAR get millions of dollars for the privilege? It's this kind of "they're all dumber than I am" thinking that creates a loser. I wish everyone could escape it, but obviously not. Good luck. You'll need it. Paul Kaz P.S. This is not directed solely at jebj. If anyone asserts that they are making money consistently, who am I to deny it? Overall, though, most people lose.

To: jebj who wrote (477)	1/30/1999 6:54:00 PM
From: AnnaInVA	Read Replies (1) \| Respond to of 611

"A" purchases stock xyz at 20 and sells to "B" at 30. "B" the sells to "C" at 40 and "C" to me at 50. << Yes, and right after you buy it from C at 50, the earnings come out to be losses and the stock drops to 20. See!! ;)

To: jebj who wrote (477)	2/9/1999 7:23:00 AM
From: Hermann Ragaller	Read Replies (1) \| Respond to of 611

Jebj, Let's put what you said in a table: cost revenue Initial owner 0 20 "A" 20 30 "B" 30 40 "C" 40 50 You, the last buyer 50 ? ----------------------------------- total 140 140 Do you see now why it is a zero sum game? All the previous buyer's profits have been paid by the last buyer. This only works as long as new money is constantly flowing into the market. The money must come from an external source (ultimately from the federal reserve as the only institution which can "generate" new money from nothing). One can also view this as a kind of inflation. There is no "real" value behind a stock except for the liquidation value from the balance sheet. HR