Do we trade against" dumb money "or " smart money" ?

genebort · Mar 28, 2003

I feel quite shure that we (as daytraders) are mostly trading against "dumb money", when we use NASDAQ, but who is the competition when we would trade the eMinies? Appreciate some opionions on this. In other words, is it easier to compete using NAZ or the eMinies?

jack hershey · Mar 28, 2003

Quote from genebort:

I feel quite shure that we (as daytraders) are mostly trading against "dumb money", when we use NASDAQ, but who is the competition when we would trade the eMinies? Appreciate some opionions on this. In other words, is it easier to compete using NAZ or the eMinies?

The money mix of players in either group is probably about the same.

You could simply rank the set of common mistakes people make to find out who is above or below you in the competition that you are facing. The neat thing is to move higher and higher on the list. Mostly everyone here tells you where they are on the list.

hardrock375 · Mar 28, 2003

Quote from genebort:
I feel quite shure that we (as daytraders) are mostly trading against "dumb money", when we use NASDAQ, but who is the competition when we would trade the eMinies? Appreciate some opionions on this. In other words, is it easier to compete using NAZ or the eMinies?

Well, as the saying goes, if you do not know who the dumb money is...

cornholetrading · Mar 28, 2003

I think I have definitely been the dumb money this week.

Free Thinker · Mar 28, 2003

the dumb money has mostly been harvested. those that are left are probably smart money.

iceman1 · Mar 28, 2003

Quote from hardrock375:

Well, as the saying goes, if you do not know who the dumb money is...

yep

iceman1 · Mar 28, 2003

Quote from vhehn:

the dumb money has mostly been harvested. those that are left are probably smart money.

Was just discussing this with another trader... was easier in the days when everyone was a pseudo-trader. Lot of those guys been weeded out. Now mostly the "creme" or close to it..

is left.

marketsurfer · Mar 28, 2003

Quote from genebort:

I feel quite shure that we (as daytraders) are mostly trading against "dumb money", when we use NASDAQ, but who is the competition when we would trade the eMinies? Appreciate some opionions on this. In other words, is it easier to compete using NAZ or the eMinies?

both and nether.

best,

surfer

AAAintheBeltway · Mar 28, 2003

I think it's more a question of timeframes. If you accept that the market is mostly random, then the dumb v. smart money issue is problematic. As a daytrader, the dumb money to you might be a huge fund that is not worried about the last $.25 on a fill, but that's where you live.

MondoTrader · Mar 28, 2003

I agree.

we are really not trading against any individual, except when you look at the extreme micro scale.

On a longer time frame like the one I use, we are really just trading against the market which is an average of what everyone does, smart and dumb.