Not necessarily true. If you are trading a strategy that trades relatively small size (due to scalability issues) then hedge funds arent your competition... Also, it ISNT a zero sum game... different time frames allow for winners on both sides of the trade. A swing trader can be unwinding a position for a profit, while the scalper takes the contra side, and rides a continuation for a small profit..
Then this should be a small size paradise. Empirical evidence says though that small size is hit harder than large size. Unless empirical evidence means nothing to you. Trading is zero-sum. Unless you show to us how one can win without someone else losing money. Your example is false because it does not consider the losers of the transactions. Just think about it: can someone take money home trading without someone else providing it from his account? It is a simple question with a simple answer: NO. Anything else is wild wet dreaming. If you want to make money trading, you have to take it from someone else.
A bit of a truism I think If an equity only goes up, then each time it is traded, each owner will profit from it. Of course there will be owners that earn much or less, but no one will loose money on it. Why do you say there are losers in a transaction? NB: I know it's different with shorting - or is it?
I guess it depends on your strategy because the past month has been much easier for me. Gimme volatility anyday. It ain't the algo's. The environment is just changing. Develop a tool to measure volatility (or use an existing one) that makes sense to you and the light bulb should glow a bit brighter. When the rubber hits the pavement you are trading volatility or the lack of volatility. It takes different strategies for different environments.
It is getting harder. The Truth is if you want to be successful, trading doesn't stop when the market is closed. You review your trades(biggest Losers Only). I am a firm believer that humans were not meant to be traders, we get angry, we may have a biased and other issues that may influences our decision making process. Please be aware that algorithim trading is here to stay and they don't ever lose, three months with one losing day(WTF) while us regular traders are trying to support our family via the market. To summarize, trading is harder than it was ten years ago, closed to 70% of trading is done by algorithim supercomputers, please try to automate your trading and make sure your trading plan fits your personality.
It may be harder for day traders, but I'm not a day trader so I'm not sure... but if you're a swing trader with a reasonable strategy it's not so bad.
I agree... Markets can be bullish, bearish or flat, volatile, non-volatile. One has to have an edge and to trade all markets.
X2 I used to trade 400K RTs per month up until about five years ago, and completely changed my style to swing trading - there is great clarity in standing back away from the turbulence.
Zero sum game belief is a fallacy if you trade futures or write option contracts, especially when you have a margin call then it becomes a negative sum game!
I would agree in part. I spend more time analyzing my trading results than I do analyzing the markets but I don't spend all of my time analyzing the losers. I analyze the losers, relative to the winners and I'm espcially concerned with the amount of profit that is generated for a given amount of risk assumed. The reward, or potential reward, must always be bigger than the risk or potential risk. As you would expect there's an element of art associated with this type of analysis because if my methods say a 3 point profit potential was there vs. a 1 point loss it doesn't necessarily mean that was the case. I analyze the markets to detect subtle changes in the character of the market that lead to dramatic changes in the character of the market. Diito for my trading results. Everything has to be analyzed relative to historical performance Trading is a process of analyze, adjust, implement, and repeat, that never ends because the market character never stays the same. Suffice it to say, I don't believe the black boxes work without going through the above mentioned process. And then there's the analysis of you mental state. Does the grind ever get easy? Not a chance. That's the thing that keeps us coming back