Beware: the folllowing is induced by sublime rum from my wife's homeland, Puerto Rico. (Ps. moderator dude, if you want to put this in another forum, no problemo). I have been involved w/ the day trading scene as manager and as trader for some four years now. So I have seen a lot of failures, some minor triumphs, a couple of continued successes and a good number of people who are simply confused. As as I embark again, hopefully w/ a good chance for success (I have been a good s&p futures trader and a break-even+ equities trader), I wax philosophic: Do day traders--defined as those who seldom keep a position overnight--really provide a service/benefit to society at large? Anything beyond the old "price discovery" argument? Anything beyond h. houkin's "we-keep-the-mms honest" argument promulgated during the days of odd and even 1/8 pts. on nasdaq? Do we day/aggressive traders of 2003 contribute anything to society to the point that--like the obvious candidates, teachers, firefighters, doctors, engineers, etc.--if we were all were made to disappear overnight, the world would be a worse place because we no longer existed? Two flippant answers come to mind: 1. "I can't think of a single good societal reason we should churn in and out of the stock du jour," and 2. "does it matter that we 'contribute/don't contribute' to society?" And does the second response unmask the cynicism/selfishness of the average (really good) trader? Make no mistake: I am a guy who loves to trade and who has recently set up professional and personal life to do so.... But if we are so goddamn'd smart, w/ our computers, tech analysis, tape reading, gann, fibo, astro and all the other stuff, are we still missing the point if we provide nothing to the larger community? Mebbe this was covered before in et; I couldn't find it. If you respond to this, please either refer me to previous posts about this subject, or give me something of substance. Regardless of you responses, I will continue trading, and with gusto. It would just be cool to see how others view themselves in the larger context of life. Thanks. JB
I have asked this question of myself before. And there is another excellent thread about the same that was done fairly recently. It really boils down to personal intent. Because yes our activity helps to create jobs, that is unquestioned. The whole DAT business is about us. And we do provide liquidity. But is that our intent when we trade, to create jobs, to provide liquidity. It's not mine. Mine is to make money. But the guy on the production line at GM. He could ask the same question. I seriously doubt while he is attaching the dashboard to the chassis that he is thinking about providing a means of transportation so another Joe can get to work on time and feed his family. Heck no. He is waiting to get home to momma and open up the first of a sixer of Blatz beer, dream about a new used fishing boat, and go see lil' Johnny play some ball. I didn't create the opportunity, but it's there, it's legal, and I love doing it. So chill with that bottle bro', and think about fun stuff.
Brother InL. <<It really boils down to personal intent. Because yes our activity helps to create jobs, that is unquestioned. The whole DAT business is about us. And we do provide liquidity. But is that our intent when we trade, to create jobs, to provide liquidity. It's not mine. Mine is to make money.>> Ok, lets say we help provide jobs to the bookkeepers. Thats cool. But lets admit it: they are paper pushers making sure the computers are keeping up (and I dont say that disparagingly, I used to do that, and do it well), but there is nothing more damning than faint praise. If day traders went away, would the world be different at all (other than a 30% decrease in stock volume)? And if it is not, shouldnt we be doing something else (I cant imagine doing anything else with the same commitment Ive done trading, but thats a personal thing....)? JB. Ps. I dont like redundency except in engineering, where was this subject covered recently?
Here's another point you might want to ponder while you're in your philosophical mood: Are we really here "to provide a service/benefit to society at large?" I mean, think about it. What goddamn good has any do-gooder really done for "society at large" that could not have been achieved had individuals simply chosen to lead their life with some basic truth and integrity? Generally your question seems to be asked by guys around their 40's who are questioning "what's it all about?" I guess you could say I'm well past asking that particular question at my age. But what I think it's "all about" is the quest for truth, integrity, authenticity, honesty, and how to bring those into your own life. To me that has nothing to do with "society at large", but to the extent that every one concentrated on the aforementioned quest, I'm sure society at large would become a better place. Either way, if you're guilt ridden because you think your purpose here on earth is to somehow benefit society at large, then go become a nurse. Seems like a simply solution. OldTrader
Each individual life in society is merely worthless in the microcosm view and to a grandeur macrocosm view. We all die and after life, there's nothing left of us. Human memory is limited and we all forget. If there is meaning in life, it's only to spread your sperm and/or egg to avoid extinction of the human race, ethnicity, or your family. But in order to avoid extinction, we need to have sex, make money for social and monetary stability, and etc.. We work for survival of your own good, survival of your species, race, and family. So what about trading... we trade for money to survive. The egoistic satisfaction of other mental aspects are merely worthless because our mental perspectives can't be passed down to others and only exist in each individual, but in reverse that's why it's important... though if we die, it's worthless... ... So sticking to society... the highest contribution you can make and what to think of is what can you do to help the human race or the society in which you feel attached to survive and prosper in the future. --THIS POST HAS BEEN EDITED--
If you are a successful independent trader trading with your own money, you demonstrate that there are other ways to survive and excel besides kissing the ass of the boss or playing office politics on a day to day basis.
javaboy, There was a prior good discussion on this topic... you should read it. http://www.elitetrader.com/vb/showthread.php?s=&threadid=20180&perpage=5&pagenumber=1 NihabaAshi
By trading, you add volume & liquidity to our nation's capital markets, thereby making them more attractive to investors. Also, by buying dips, you help stabilize the markets, and lessen potential massive price drops. The very existence of strong capital markets (which you are helping to stabilize) is crucial to the existence of the millions of jobs of those employed by exchange listed companies. The IPO is a helpful tool of a young up & coming company seeking capital for expansion. Expansion= more production and more jobs. The paychecks of the firefighters & teachers which you hold in so high a regard, could not even exist, (at least not at the high 'western' standards of living.) if not for the productivity of America's exchange listed corperations.
Speculators... don't help... look how many times we as speculators turned the country's currency down to the hole. We the speculators also turned on the internet bubble and we also are the ones who went short on it... Paychecks for firefighters? Yes, we took their money... look how much of the FF and teachers were invested... now they lost most of their money... Maybe liquidity is the only good reason we're around but that liquidity can also cause a crash to happen when all opinions of the market sync to one...
I really don't wish to start a flame war at all....but I gotta ask: You're not rich, are you? You're having alot of trouble properly sequencing cause & effect here. Without speculators, there is no capitalism. Without capitalism, there is no FREEDOM.