pattern daytrade rule discrimination ???

Quote from whitster:

"For every winner, there is a looser...and for every looser there is a winner... If you have a friend that is losing A LOT of money Daytrading... all you have to do is do exactly everything OPPOSITE and you be gaining money A LOT of money. It "can be" almost a 50/50 percent chance (since fees are taken into an account)"

only true in the zero sum markets (futures, options, etc.) NOT the stock market

it is absolutely false that for every winner there is a loser. the stock market is not zero sum and has steadily (with some major hiccups along the way ) :) built wealth over time

if you don't understand this, then you don;'t understand the structure of the stock market (or any other non-zero sum market ) to understand that you can have MORE net losses than gains or more net gains than losses in the stock market. that's cause it's not zero sum. the sum varies. as long as capitalism/our economy keep creating wealth, the longterm trend of the market will remain up

btw, there has never been a 20 yr period in the history of the stock market where dollar cost averaging into the market on a monthly basis, would not have given positive gains, and in the vast majority of those rolling 20 yr period, quite good gains
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Don't start this again. Wealth is not created by the stock market. If you buy an ipo at $1 and I buy it from you for $10 wealth was only transferred, not created. Just because there is more money in the market today does not mean there is more wealth. You are ignoring two crucial factors. Inflation and the national debt.
 
z, it is not zero sum

zero sum is a concept (created via game theory) wherein a system is closed and no wealth can be added, only transferred

the stock market is not structured this way. theoretically, it can have ANY sum, whereas a zero sum game can only have one sum

the point is that in the stock market you can have MORE net gains than net losses and vice versa

that is impossible in the futures market, since there are exactly equal and opposite positions.

that is not true in the stock market

think of it this way -

a market of one stock, one share

IPO priced at $10
john buys for $10

market capitalization $10
wealth in the system $10

price of the stock goes to $20
john sells to paul

market capitalization $20
wealth in the system $20
wealth gained $10 (netted to john)
market has created $10 of wealth

stock goes down to $18
paul sells to frank
he lost $2
netted loss was $2

etc. etc. etc.

this can flux endlessly. since the stock market goes up over time, it has built wealth. that's because the underlying companies have built wealth, and the market price reflects that wealth.

there is NOT an equal amount of winning and losing positions in the stock market.

the futures market is a market of agreements, not stock. they can be created out of thin air and they MUST have equal and opposite positions for every contract that is long, one is short

period

that is not the case in the stock market

read that above paragraph again: EQUAL AND OPPOSITE positions

that is why the futures market is zero sum. ditto the options market

fwiw, i trade futures for a living. the fact that it is zero sum is irrelevant to the fact it provides me income

but it behooves one to understand the structure of the market

do a search in this website. this has been hashed over many times

also google "zero sum game" or read a good book on game theory. that would explain what the concept of zero sum means more eloquently than i could
 
The only time the equities market is zero sum is when a company goes out of business. As long as the stock continues to trade it cannot be zero sum. Dividends also make it so equities cannot be zero sum.
 
I kinda see what you're saying.... then this actually means if the stock market is not a zero sums game...


it is possible to have all winners... or all losers... considering that value can be created...

would this be a good example?

say for example, poker is zero sums game...
are you suggesting... the stock market is something like say...
in the middle of the game, I ask a player if they want to buy my priceless antique shoes if they give me more poker chips? now if that player exaggerated the value of those antique shoes to another player and ended up selling it at a higher price for more chips....basically, even if more chips entered the game and visa versa..... i'd still think it was a zero sums game.

even at the height of a rally...say everyone gained, but the last person who jumps on late will be left at equallibrium of that company's market share value. He isn't necessarily a winner or a loser yet.... he can only be winner if he sells his stock for a higher price and now has transferred this "uncertainty" to person buying his stock at a higher price. I just don't see how everyone can all be "winners" or "losers" at one time.

This can happen in Poker though...
 
Quote from whitster:

IPO priced at $10
john buys for $10

market capitalization $10
wealth in the system $10

price of the stock goes to $20
john sells to paul

market capitalization $20
wealth in the system $20
wealth gained $10 (netted to john)
market has created $10 of wealth
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No wealth was created. It was only transferred from one person to another. The money being used for the transaction is already in the existing money supply. If something already exist, how can it be created ?
 
Quote from volente_00:

No wealth was created. It was only transferred from one person to another. The money being used for the transaction is already in the existing money supply. If something already exist, how can it be created ?
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Wealth is created by the corporations making profit and being worth more money than they were in the past.

I own my own company. I turned 25,000 dollars into 3 million. I am a stockholder in my company. Wealth was created the same way as wealth is created in public companies.

It surely wasn't transferred from anyone other than my competition.

edit: You are totally discounting GROWTH. GROWTH IS REAL.
 
Tisk tisk tisk......



I HAVE NEVER SEEN A MORE NAIVE GROUP OF PEOPLE!!!



DO YOU REALLY THINK THAT ANY RULE OR proposal GETS PASSED WITHOUT THE EXPRESS CONSENT OF MORGAN, GOLDMAN, MERRILL, SMITH BARNEY AND PERSHING????


WAKE UP MORONS...HERE IS A CLUE:

WWW.FINANCIALINDUSTRYASSOCIATION.COM

1/3 OF THE SHARE HOLDERS OF THE NASD ARE AGAINST THE merger...WHY?????????????
 
god there are so many forms of discrimination that are considered acceptable and are common. You're complaining about discrimination against people who don't have 25k? Come on. That's hardly substantial. That's like saying airlines who charge extra for first class are discriminating against poor people or cheapskates.
 
Quote from razor99:

a guy who is a pretty good trader and only has limited funds is exempt from daytrading because he needs 25k according to the rules.this rule is supposed to "protect investors"(bullshit). then you have a guy with absolutely no trading experience but happens to have 30k given to him by his father,confirmation/graduation money ect...this is so unfair it's obscene and in my opinion discrimination.
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portfolio margining possibly becomes available 4/1.. the minimum will probably be between 500,000 and 5 million.

lucky you, you will be able to start a new thread with the same words except for changing the 25k figure.
 
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