are buy side traders better than the sell side counterpart?

Discussion in 'Trading' started by OTCkrak, Nov 28, 2011.

  1. this is an old adage that I believe to be unwarranted with no evidence.

    i concede that the very best trader in the world, (however you define that) is most likely on the buy side based on compensation incentive.. but i believe the most experienced specialists, market makers, dealers moving the biggest volume may very well know the market better than some schmuck taking orders from investment managers.

    i define trader as someone who actively enters and exists the market for any reason as their main job function.
  2. You can't really answer this question unless you make a clear distinction between mkt-making and prop.
  3. The short answer is YES.

    The reason behind is that buyer has a big brother behind them - our "smart" government that don't hesitate to print money :D
  4. Historically, the general stock market has seen appreciation. Since the beginning of any market, there would be a stat I'm sure that favored buying over selling.

    Regardless, I am trying to teach myself to trade either side and eliminate any bias I have to buying or selling, because, anything can happen at anytime, especially in the stock market. In my short lifespan of trading, the market really hasn't gone anywere. So if I were long side only I'd have missed out on 50% of possible maximum profits!
  5. Shanb


    lol, I don't think that was the buy and sell side that the OP was talking about. Think MM, brokers for Sell side, and hedgefunds, prop for the buyside.
  6. I vote Buyside, with respect for the sellside.

    Why? More action / effort behind the act of Buying - they dont HAVE to buy (or sell, act really), but do. Without them, there is no activity / vol(ume)(itility).

    Much respect for the sellside though in making the market possible in the first place.

    Has nothing to do with / no bearing on who is smarter. Just the dynamics of the experience.
  7. Yea, I'm not familiar with the rules regarding those players. So I could offer only what I did.

    Are there special incentives for those groups?
  8. bearnine


    Have you seen a 100 year chart of the market? The last 100+ years obviously gave an advantage to buyers.. if you wait long enough you eventually get bailed out ... is it about to change though? I think so

    it is possible that we are making a LH(lower high) here or even moving into a range on the grand timescale...

    as far as just day trading goes i think the advantage is neutral
  9. yeah, just to clarify.. i meant sell side and buy side quote on quote of the industry.
  10. As I said, it's impossible to answer your question w/o making a distinction between the mkt-making and prop activities. Believe it or not, there are quite a lot of good mkt-makers out there who don't do prop, especially nowadays. Obviously, it's also true the other way round. And you can't compare a good mkt-maker to a good prop guy, because the two skills are very different in a whole variety of ways.
    #10     Nov 29, 2011