Question, When the dow jones rallied to almost 200 points today, is it a common conception that everyone made money today? If not, how is that possible? If so, how do you maximize the profits? Thanks~ Hope you guys made some cash today....
Does everyone win when the roulette wheel lands on Black? No, those who bet on Red lose. Next spin when it lands on Red, the winners and losers will switch places.
The vast majority of market participants are long, so they made money today. Probably most traders also have a net long position if they include retirement plans and non-trading investments. So, yes, a lot of wealth was created today.
And next week when the gears switch to reverse, about an equal amount of wealth gets erased. That's what trading is about: taking your money off the table before its gone again.
good point... and sometimes it doesn't even take a week. good traders don't give all their gains back.
It could happen this morning. It might or might not. By next week though, it very likely will. That's why I said "next week".
Not everyone has a business plan that is trend following. The market trends like this intra day maybe 3 or 4 times a month. I have traded with many guys who make a living scalping reversals, and that is all they do, so they don't make money on days like today. It's what they do all month and it makes them money consistently on chop days, so they sit on the sides or trade lite on days like today. You might ask why don't they just swtich for that day.... The answer is simple - if you are a scalper for months at a time, you can't just turn on a switch and say "today I am a trend trader." It's not your business plan, plus mentally it is tough to look at your profit and loss objectives a completely different way. On a day like yesterday(huge trend day up) the chartist made money, the scalpers were trading lite, on days most traders are complaining the market isn't moving - scalpers are cleaning up trading 10,000 shares back and forth all day for small gains. There is nothing wrong or "right" about either style, but everyone does not make money on big trend days. ps. I have been trading full time for 3 yrs and have tried to do both (scalp and intra day postion) to take advantage of both types of markets - MENTALLY IT IS IMPOSSIBLE to have diferent paradigms and plans day to day for profits and losses. I have settled on multiple time frame analysis mostly 5 minute charts. it suits my personality well.
How can everybody win? For every buyer there has to be a seller, so for every winner there has to be a loser. right?
Everybody can win, if no one shorts and the market continues to rise. The only loss is what someone "could" have made by holding and selling at a higher price than they sold for. Say you have an IPO, and the stock price on day of issue is 10 bucks. I buy 100 shares, and next day sell to you for 11 bucks. Day after that, you sell it back to me for 12 bucks. Day after that I sell it back to you for 13 bucks. This goes on until the ponzi scheme ends, and someone gets left holding the bag. Isn't that what the bubble was all about? Grubman and Company types pumping up the "price" of stocks, the Wall Street insiders getting out at the top, and the foolish public getting stuck holding the bag? How many people want to admit they own some JDSU they purchased at $120 bucks?
contradicting yourself again...triple 7.....if someone gets left holding the bag, then he is the one that loses ( ie. not everyone wins)....peace.....i know i know...who would have thought the Mavs could pull that offffffff........