Wall Street = Casino. Minus Sum Game.

This is a discussion on Wall Street = Casino. Minus Sum Game. within the General Trading Chat forums, part of the Reception category; It doesn't depend how you model the market. The market is what it is. Commissions and spreads are there. That's ...

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Old Jan 23, 2010, 12:53pm   #134
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread It doesn't depend how you model the market. The market is what it is. Commissions and spreads are there.

That's the issue though - people 'modelling' things.
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I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

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Old Jan 23, 2010, 1:33pm   #135
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
It doesn't depend how you model the market. The market is what it is. Commissions and spreads are there.

That's the issue though - people 'modelling' things.
I know it's -ve sum. You know it's-ve sum. I'm surprised the thread has run for this long.
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Old Jan 23, 2010, 2:21pm   #136
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Re: Wall Street = Casino. Minus Sum Game.

Yeah I'm a bit surpised as well.....when its fairly obvious that TA works, and works very well....when used in a effective method.

By TA I mean anything from candlesticks, MAs, chart patterns, trends, indicators , price action etc

Problem with fundamental analysis is that the market prices in a lot of known and projected fundamental information, as there are always insiders and entities who have access to information ahead of the masses....very difficult for small / retail investor to compete with big / insider money

TA is suppposed to pick up this inside information acting in the market via chart patterns , trends etc...
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Old Jan 23, 2010, 2:44pm   #137
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Prawnsandwich View Post
Yeah I'm a bit surpised as well.....when its fairly obvious that TA works, and works very well....when used in a effective method.
If it is obvious that TA works, and if 90% of traders use TA, why then are there persistent reports that 90% of traders fail?

Quote:
Problem with fundamental analysis is that the market prices in a lot of known and projected fundamental information, as there are always insiders and entities who have access to information ahead of the masses....very difficult for small / retail investor to compete with big / insider money

TA is suppposed to pick up this inside information acting in the market via chart patterns , trends etc...
Supposed to being the operative phrase.
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Old Jan 23, 2010, 2:51pm   #138
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by robster970 View Post
I know it's -ve sum. You know it's-ve sum. I'm surprised the thread has run for this long.
I was confused when Shakespeare wrote "like is a tale told bu=y an idiot , full of sound fury , signifying nothing"

Now I understandwhy he wrote it.

Mr D , couldn't you just have said "the spread makes it a - minus sum game?"
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Old Jan 23, 2010, 2:53pm   #139
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by montmorencyt2w View Post
If it is obvious that TA works, and if 90% of traders use TA, why then are there persistent reports that 90% of traders fail?



Supposed to being the operative phrase.
In the first instance I'm not sure that 90% of traders use TA..where did that figure come from ?....Im sure many are looking at fundamentals, eg earnings and many are probably not using any proper system apart from what they hear / see on Motley fool, yahoo finance CNBC etc...or are just gambling

Traders that use TA and are failing are not using it correctly..or or are not exercising money managment or probably just dont understand what it is...as as evident from this thread..

Supposed to being the operative phrase.[/QUOTE]

It can really be very simple....the price of a stock may be going up over a period without there being any obvious news or fundamental information in the public domain and you can use TA to work this out ...How ? By looking at a chart and seeing the price going up...

Last edited by Prawnsandwich; Jan 23, 2010 at 2:55pm. Reason: error in text
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Old Jan 23, 2010, 3:16pm   #140
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
Sorry - but I only got to the first paragraph that said trading was a zero sum game.

Trading is not a zero sum game.

For example - take 2 traders, one going long at the exact same time the other went short with the same position size. They both exit at the same time. In this case, you would say that one trader lost and another gained.

The losses and gains are not equal. The losing trader lost more than the winning trader won.

Hence minus sum game.
You're wrong. In the example you give above both traders are TAKING liquidity from the market, whereas in fact in each and every trade there is one party taking liquidity and one party providing liquidity. So yes indeed it is negative sum between two traders both taking liquidity, but that just isn't how the market works!
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