It's a pretty massive mistake, one that smart people unfortunately make far more often than they should, to try to collapse complex social constructs into physics problems. Creating value in the business world is in no way the same as putting energy into a closed system. Go back to my example, my company was created from nothing, and now both employs a bunch of people and makes a bunch of money doing something that didn't exist a few years ago. How is that zero sum? Who lost an equal amount that the company, it's employees, its investors, and its customers gained?
Are markets zero sum game?
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First off you didn't actually address my question?
Second, no-one is disputing that there are things that are zero sum games in life and even in investing. When you write or buy an option or futures contract that's generally a zero sum game. That doesn't mean all markets are. The amount of time you have in life is finite, but that doesn't make it a zero sum game. For example, working out for an hour every day is statistically going to expand both my lifespan and the portion of my lifespan that I'm perfectly healthy far more than an hour for each hour I exercise.
The poor guy bought the stock at $50 (from you) and now its price is $5, remember?
The guy who hit your offer could have been short from$400.
You clearly wrote : "As a trader if I bought a share of a company, because I believed I could sell it for more in the short term,I didn't create any losers, I added liquidity to the market, And wont be shamed into thinking otherwise.
Like I said (see post above), when you sell a stock at a higher price and its drops later there is a loser at the other end.
So your stock trading activity is not harmless, even though, once again, the stock market is not a zero sum game.
Please no more comments, I am done here.
Your English is actually great! Especially, if it isnt your first language ! If I have trouble understanding your question I will try and clarify before answering. It is okay and good to ask these questions, mankind has probably been questioning purpose and meaning since he first was able to think. unfortunately sometimes people who we seek guidance from, parents, professors, aunts & uncles, bosses, higher ranking superiors, random dudes on an online forum dont always have the answers. But I will give you my perspective, and you have to make your own decisions based on your own reasoning.
ON CURRENCY*
To be fair I have no idea (or interest in the currency market). But to answer your question on, what gives "value to currency".
Imagine you are a King, there is an open market in your Kingdom where people come to trade. Many of your subjects (both those with much and those with little) come to you complaining, saying that if you could provide a coin it would make their transactions not only easier but much more fair. They even mention to you that the Babylonian, Persian, & Roman King has been doing this for centuries. You are a well respected King, and people feel safe living under your rule. The people of your Kingdom love red roses, you guarantee that for every coin you print with your imprint on it you will offer a dozen red roses for each coin that is brought to your "house of coins" (later becoming a bank).
YOU HAVE NOW GIVEN "VALUE" TO THIS CURRENCY. (Ofcourse, if your grandson is not as competent a ruler he could easily destroy this value, but in effort of keeping this reply shorter I will leave that part out.)
So now you have moved the goalpost :O). the original question was "are markets a zero sum game", however I will still address the "speculation" & "liquidity" questions as well. Also, earlier I asked you to clarify which markets, it seems in your latest post you are mostly referring to currency markets?
GENERAL MARKETS, LIQUIDITY & SPECULATION
Instead of cars, (or horses) lets think of t-shirts for example, we can complain that the t-shirt vendor is "hustling" to make a profit. Of course, that t-shirt vendor also has to invest resources (currency) to buy enough t-shirts from the factory (which has to invest resources) to buy the materials from the farmer (which has to invest resources). Also, this t-shirt vendor, has to invest either his/her time or more resources as well as taking a risk that nobody buys his t-shirts, to sell to you which only want 1 t-shirt, you are well aware of this vendor making a profit off of you but seem completely content with avoiding how much energy was invested to get you that t-shirt at a price where you would be willing to buy it? (this t-shirt vendor provided LIQUIDITY, he also SPECULATED that he could make a profit)
Flipping houses, although may seem very simply and easy from Hollywood produced entertaining television shows.is a very, very, tough, business, it is actually very risky, and if you dont know what you are doing you can lose your shirt, and owe investors money just as easily as you could in the stock market. People, from the outside may see someone post numbers of making +25k from a "flip", but have no idea how much energy, management (have you ever managed a construction site???) and RISK the "flipper" was putting into this project.
Again, we are moving the goal post a bit here, however...
Both speculation & liquidity is loved and adored by ALL participants, there are of course "bubbles" which are ignited by human greed, and it is not until after this "bubble has burst" that those who greedily chased will cry foul.
In the housing market, liquidity & speculation is great and I will explain to you why. if you are a buyer. You could in theory go door to door, and ask people if you could buy their house. You can make them an offer and keep going until you find a house that you like and the seller is willing to not only sell, but sell at a price you are willing to pay. Good luck with this approach, of course there is another approach (a market) where people put their sweat,energy, and $resources to providing you with a much easier way of doing this transaction. They have *SPECULATED* & are providing *LIQUIDITY*, with out such your task of buying a home would be much more difficult.
So to answer your question, liquidity is beneficial to both parties. both the buyer and seller are benefiting from someone elses, RISK, LABOR, INVESTMENT & TIME.
***
You can study the Tulip Bubble from 1637, to get a better understanding of markets, and bubbles and how Speculators and those providing Liquidity are the ones that get rekt when the bubble finally bursts.
Again, I am not into currency markets however if you want to get into currency trading you should do much more research. I am not aware of the market but from BS advertisements and what friends have shown me, I think most "traders" are really just making small bets only within their brokerage, not all brokers are BS but I think most traders brokerages are likely just taking small bets, this is not good or bad but they arent really "currency traders" despite what they may think in their imagination.
Lets say for example, you are the director of the central bank of a country. You do not have much faith in your countries currency, should you SPECULATE and trade some of your currency to something that you feel will hold its value better? You traded your worthless currency for a stronger currency which you are now holding in your reserves. Who won? who lost?
got it, you will make accusations, not be able to provide (even in theory) any evidence and then ask for no more comments. please excuse me but this will be my last, and please no more comments from you either and I will call it fair enough.
So to repeat, me putting my stocks on an exchange (market) to be sold at a certain price has absolutely no relevance to what happens after someone buys them. I did not "hustle" this buyer into buying these stocks off of me, knowing that it would drop, that is actually illegal and obviously immoral. I bought and sold on a price from the exchange (MARKET) that I thought was fair. The buyer also bought and sold on an exchange (aka MARKET) he thought was fair. MY TRADING ACTIVITY did not in anyway create a loser. The loser created his own loss and we both as adults took the same risk.
It may be easier to grasp this concept (for @Tradex and others) when you think of a bond. Imagine I buy a 10 year bond and hold it for 5 years, receiving interest payment the whole time. Then I sell it to someone who holds it for the remaining 5 years. Did I lose, since he got interest for the next 5 years? Clearly not, he paid the lump sum that represented the net present value of those interest payments and I got it up front, something that clearly I preferred when I made the sale over getting that NPV over time. Did he lose, since he paid me a lump sum up front? Clearly not, he got the payments over time he was seeking. Did the company that issued the bond lose? No, they got capital up front that they had the opportunity to use more productively than the interest rate. Stocks are no different except that they as an instrument generally have a higher return to adjust for the higher risk. It's just much more obvious with a bond that it's not a zero sum game when a bond is sold.
"How is that zero sum? Who lost an equal amount that the company, it's employees, its investors, and its customers gained?"
Time also is a limited resource.
Time management seems like zero sum game.
Some are better at leveraging others time in their favour.
I cant know if in background the collective loss is equal to the gain of company, it's employees, its investors, and its customers.
Also depends on how parasitic business scheme you are operating.
Goods and services supply chains are complex and too little info on what your company specializes in.
When using gains someone will also provide goods and services in return.
I dont know if you get more services for the services you offer .Whoever gets less is on losing side IMO.
I have not seen many true win-win situations in life where there is no loser in background.
Large part of economy is probably zero sum.
I once saw electrician's & carpenters and wall install all done in same room. Its was a mess.
Often it gets solved by asking workers to work at weekends, to avoid fines of missing schedules.
If is is inflation related then working people lost.
Not sure how that investment would work out, probably would get poor conditions.
But id assume original currency value would drop further when entering the "investment"
I answered very generally.
Time also is a limited resource.
Time management seems like zero sum game.
Some are better at leveraging others time in their favour.
I cant know if in background the collective loss is equal to the gain of company, it's employees, its investors, and its customers.
Also depends on how parasitic business scheme you are operating.
Goods and services supply chains are complex and too little info on what your company specializes in.
When using gains someone will also provide goods and services in return.
I dont know if you get more services for the services you offer .Whoever gets less is on losing side IMO.
I have not seen many true win-win situations in life where there is no loser in background.
Large part of economy is probably zero sum.
No.as far as i know it involves many variables and also good work syncing from every speciality to get things done within schedules.
I once saw electrician's & carpenters and wall install all done in same room. Its was a mess.
Often it gets solved by asking workers to work at weekends, to avoid fines of missing schedules.
Depends on why the currency had low value.
If is is inflation related then working people lost.
Not sure how that investment would work out, probably would get poor conditions.
But id assume original currency value would drop further when entering the "investment"
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