How big is the impact of individual day traders?

Discussion in 'Trading' started by matador04, Jul 2, 2008.

  1. This question was posed on another forum; I wanted to get ETs point of view. Don't mind the assumptions made in the post :) most of us are jr. ballers, big ballers, or retired ballers.

    I understand this depends on the market sector. I know a lot of individual non-professional or semi-professional day traders who try to make their luck in FX markets and of course stocks using TechAnalysis, a rudimentary risk and money management and a direct access broker. You know, these kind of people that read "market wizzards" make 15% returns in three days and won't get tired talking about it...

    Does these players have a any significant influence on prices? Any academic or practical research on their impact and volume? Are these traders "free lunch" for pros and provide an income(edit: for the pros )?
  2. Cascading shows the biggest impact.
  3. 1) Daytraders can produce a lot of volume but it tends to be balanced since most have a very short-term time horizon. Daytraders, for the most part, feast off of one another.

    2) Institutional investors move more money around which tends to produce the biggest trends.
  4. a single retail individual technically doesn't have muscle or buying or selling POWER the price in highly liquid securities.

    Market makers or institutions with large positions move a market maker is an 'individual' or large shareholder is an 'individual' or single entity.

  5. individual retail traders are mostly scalpers or front runners in liquid high volume securities