Registered User
Joined: 10/7/2004
Posts: 2,181
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Greetings all;
Haven't been by in a while; I apologize. I pray everyone is doing well.
I want to pose a few questions to get some healthy debate going:
Does daytrading help or hinder the markets in general?
Does daytrading help or hurt a company specifically?
Does winning at daytrading hurt someone else? If so, how?
OK, interested in your opinions.
thanks
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Registered User
Joined: 1/28/2005
Posts: 6,049
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I would say : helps. (liquidity)
I don't think you can hurt a company be holding stock
minutes/hours.
If there is anyone not to be trusted in the whole equation.
It would be those who sell it as an easy living.
(I'm sure more traders have blown out there accounts
then damaged companies)
Thanks
diceman
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Registered User
Joined: 12/31/2005
Posts: 2,499
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QUOTE (tobydad) Greetings all;
Haven't been by in a while; I apologize. I pray everyone is doing well.
I want to pose a few questions to get some healthy debate going:
Does daytrading help or hinder the markets in general?
Does daytrading help or hurt a company specifically?
Does winning at daytrading hurt someone else? If so, how?
OK, interested in your opinions.
thanks
Does winning at trrading or even investing hurst someone else? Same question different time frame.
#$@! happens. Any time one makes a winning trade one is taking money out of the pocket of the seller/buyer. Free will in involved by all parties. We are all grownups.
Besides look and all the jobs supported by the act of day trading:
training seminars
trading coaching
videos
books, book, books...
computer sales
tax accountants
taxes
commissions
software tools
data services
luxuary purchases from profits
marriage counselors
divorce lawyers
etc. etc.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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I think winning at anything hurts someone else if that someone else isn't okay with losing or is someone who doesn't know how to view the act of losing.
If I'm a daytrader (or any time frame trader) and i have a system that requires me to take a certain trade and for sake of argument 50% of those trades are winners and 50% of those trades are losers -- but my winners are larger thn my winners by 2:1 then I have a winning system.
Now, when I place a trade and I lose -- does that hurt me? No. Losing is a part of the system.
Now, when I win, it could be anyone on the other side of the trade. An institution, a market maker, another retail trader -- all with their own agendas. If the other guy just so happens to be a troubled person with a gambling adiction and an untreated compulsive disorder who had bet his life savings in the wrong direction of my winning trade, then he will be hurt. And he should go get counseling, soon.
It's the same as if I were a professional soccer player. I am there to win. The other team is there to win. We all love the game -- but there is a specific goal (pun intended) in mind. To win.
I personally think that winning and losing both make us better people and provide a certain perspective in life. And to win with grace is just as important to me as losing with grace is.
Thanks for the topic.
David John Hall
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 Gold Customer
Joined: 11/11/2006
Posts: 359
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An interesting debate subject.
(Trust Tobydad to have the ethical concerns to start it!)
In no way could trading a companies stock, win or lose, cause it harm. They do not own the stock that is being traded. Someone else, Institution or trader, does.
I see no harm involved in a willing buyer transacting with a willing seller, regardless of the outcome.
Consider: I have both bought and sold houses. In each instance, both the house I sold and the one I bought, have increased in value over time. In each transaction, both the buyer and the seller were anxious for the deal to go thru. Winners? Losers? You never know why the other person is selling and it could be the answer to their prayers to get out of the thing. In each instance a fair price has been set, and met. Who's to complaine?
With stocks, or anything, the top price the buyer is willing to buy is within the range of the bottom price the seller is willing to sell. Else there would be no sellers.
I think it boils down to the old adage:
"One mans meat is another mans poison."
Good to have you back, Tobydad!
Mammon
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"Any time one makes a winning trade one is taking money out of the pocket of the seller/buyer."
-----------------------------------------------------------------------
I wonder. Is this really true?
What if a seller, sells it to me at a price that's higher for them?
Thanks
diceman
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (diceman)
"Any time one makes a winning trade one is taking money out of the pocket of the seller/buyer."
-----------------------------------------------------------------------
I wonder. Is this really true?
What if a seller, sells it to me at a price that's higher for them?
Thanks
diceman
Agreed ...
Unlike commodities ... which is a zero sum game ... everyone can theortically win at any given stock transcaction ...
QUOTE (tobydad)
Does daytrading help or hinder the markets in general?
Does daytrading help or hurt a company specifically?
Does winning at daytrading hurt someone else? If so, how?
Hi tobydad ....
Good to see ya ...
In general ... it does neither help nor hinder the markets longer term ... though it does cause securities to reach price equilibrium much faster ...
As far as liquidity goes .. that's hard to say ... as if you want to sell ... and shorters have jumped on the stock ... you could argue that the daytraders/shorters have removed all liquidity ...
Longer term ... it has no effect on the company ... the company's performance is ultimately to blame for it's share price ... and traders just give them someone else to blame for their own shortcomings ...
And no ... daytrading does not neccesarily hurt anyone ... as stated above ... because it is not a zero sum proposition ...
This is a big boy's game ... and sometimes folks get hurt ...
Cry babies belong on the sidelines ...
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Registered User
Joined: 10/7/2004
Posts: 2,181
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Wow, great comments thus far. Thanks to each of you. What about these situations:
Bob's uncle purchased shares of Paluxium Steel in 1935 for $0.28 a share. Bob inherited those shares 3 years ago. Paluxium Steel is now worth $37.00 a share. Bob wants to put an addition on his home and sells the shares. I buy them at $37.01 because they fit the tobydad profile. Did anyone get hurt? Did anyone lose?
2 weeks go by, shares of Paluxium Steel climb 20% in a nice breakout. On Day 6 of the breakout, the candle detaches from the upper bollinger band on high volume and I sell because it fits the tobydad profile. Price drops in a controlled fashion and levels out as it slowly descends toward the lower bollinger band. David John Hall sees a dragon and buys the shares. He earns 15% in 3 days.
A buy-and-holder likes the long term outlook on Paluxium Steel and picks up the shares to keep in his/her portfolio for the long haul.
Who lost? Who got hurt?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Paluxium Steel???
That closed down because it was cheaper to make it overseas.
Thanks
diceman
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Registered User
Joined: 12/31/2005
Posts: 266
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quite simply, daytrading is necessary, and adds liquidity to the market.
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Registered User
Joined: 2/2/2005
Posts: 13
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Just happened to see this question from Tobydad.
Like others here have been eluding too. Winning and loosing is relative. Most of us want to make money, but not all of us trade JUST to make money. All of us must take responsibility for our own actions. We are not forced to trade. We are not forced to make bad decisions. We do this on our own.
Just like our relationship with God, we are responsibil for our own decisions. Does not matter what our background is. Does not matter what our experiences are.
I want to say I really admire most of the people on this site. Now if I can just figure out how to make some money!
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Registered User
Joined: 1/28/2006
Posts: 291
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First assumption ...that anything you do longterm affects direction of an issue.
Second assumption ...that anything you do shortterm affects direction of an issue.
Third assumption...that anything you do period affects direction of an issue.
There is no such thing as price equilibrium (the system is never static), nor does 'liquidity' play any role at all in the rate or in the direction in which price moves (what I call the lie of supply/demand or volume).
The ability to capture potential in any energy system is determined solely by ability...and it is neither 'good', nor 'bad'. A scale and a wave...just like everything else existing in reality. If you can't judge potential accurately in any fractal, you're going to get mauled.
If you experience pain being a buy and holder...investigate why and fix it.
If you experience pain in your short term trading...investigate why and fix it.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"Who lost? Who got hurt?"
--------------------------------
Those who shorted Paluxium Steel.
Thanks
diceman
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Registered User
Joined: 2/13/2005
Posts: 368
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The institutional traders move billions of $$$ a day, we little day traders are fighting over the crumbs that fall off of the table.
Do you suppose there is a code of ethics in the ant world?? :)
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Registered User
Joined: 10/7/2004
Posts: 2,181
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Diceman, :Dthekubiaks, "...code of ethics in the ant world" Double :D
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Registered User
Joined: 10/7/2004
Posts: 2,181
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That was supposed to read:Diceman, :Dthekubiaks, "...code of ethics in the ant world" Double :D
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Registered User
Joined: 10/7/2004
Posts: 2,181
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I give up....
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Registered User
Joined: 7/1/2008
Posts: 889
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my own view is that the financial markets are the jungle, and the law of the jungle applies. If you step into the jungle, you are on your own. It's eat or be eaten.
There's no other soul out there looking out for your best interest. Companies will do as they wish, they will issue new shares and dilute your position in a heartbeat. Executives will manipulate financial data.
Large traders will operate in dark pools, and flash traders will keep the best executions for themselves.
I sincerely say that I could care less how my trading actions affect the market or a company. I rest in comfort knowing that this philosophy is shared by all other market participants.
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Registered User
Joined: 10/7/2004
Posts: 2,181
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Not necessarily. I don't. That's not intended to be any offense to you, I just don't share the view. Because others may or may not have my best interest at heart does not free me from the mandate to be my brother's keeper.
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Registered User
Joined: 7/1/2008
Posts: 889
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No offense taken. If you sit down at a poker table, everyone at the table understands the stakes. Your objective is to win money, not to be your brother's keeper, right?
How is the market any different?
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"If you sit down at a poker table, everyone at the table understands the stakes. Your objective is to win money"
-----------------------------------
diceman doesn't gamble.
(heh, heh, heh)
Thanks
diceman
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Registered User
Joined: 7/26/2005
Posts: 23
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First, I really appreciate the fact that this question (and/or trading ethics in general) gets asked and debated here. Personally, I don't think daytrading at the retail level has much effect. Especially if one is a trend follower, then the trend is basically already established. In that case the effect might be similar to a few more snowflakes accumulated by a rolling-down-the-hill snowball. I believe the far more insidious influences include price manipulation via rumor mongering, naked short selling, computer-driven phantom bids & asks on a huge scale by hedge funds et al. Then there are the efforts to hide the trading effects of big money via "dark pools".
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Registered User
Joined: 10/7/2004
Posts: 2,181
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Jim;Great response, good insights. thanks
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Registered User
Joined: 2/5/2006
Posts: 1,148
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what exactly does holding a stock a few hours as opposed to several months got to do with ethics?
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Registered User
Joined: 10/7/2004
Posts: 2,181
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It's a personal issue; it would be quite boring to try to explain the background to my original query. I simply wanted to see what comments arose from it.
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Registered User
Joined: 2/5/2006
Posts: 1,148
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a better debate might be a trader vs a longterm investor, which might have been your intentions, but traders can hold for long periods of time.
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