Statistics: why the stock market is the easiest market to trade

Troy Bombardia said:
The stock market is the easiest market to trade simply because unlike other markets, the stock market has a 1 directional bias (i.e. goes up more often than it goes down).
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Yes, but I think most people want to make as much money as possible in a given span of time. If all you want is to better than zero, I agree that you can buy index funds and wait. Most people here, though, are seeking more than that.
 
You don't get Section 1256 60/40 tax treatment day/swing trading general stocks or stock options. That's an 8-9K profit difference per 100K of gains.

Also, the higher your chance of winning, the lower your reward will be for the risk you're taking (in the long term) so it does balance out (no free rides on Wall Street). At 50/50, the upper bound is around 2x the reward for 1x risk. At 58% long term winning pct, that ratio will drop.
 
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Troy Bombardia said:
The stock market is the easiest market to trade simply because unlike other markets, the stock market has a 1 directional bias (i.e. goes up more often than it goes down). Other markets like forex & commodities have a 50-50 probability of going up vs down.

This means that trading forex and commodities is harder than trading the stock market. Here’s the data to prove it.

https://bullmarkets.co/stat-stocks/
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Take a look at the Japanese stock market, they have been waiting for a new high for over 30 years now. So don't tell this kinda bullshit ...
 
Troy Bombardia said:
The stock market is the easiest market to trade simply because unlike other markets, the stock market has a 1 directional bias (i.e. goes up more often than it goes down). Other markets like forex & commodities have a 50-50 probability of going up vs down.

This means that trading forex and commodities is harder than trading the stock market. Here’s the data to prove it.

https://bullmarkets.co/stat-stocks/
More...

You have to back out the 10% a year the market gives you for simply buying and holding. Once you do that, you have the same zero expected return as commodities. Put another way, the E(alpha) for all markets including stocks is zero.
 
cvds16 said:
Take a look at the Japanese stock market, they have been waiting for a new high for over 30 years now. So don't tell this kinda bullshit ...
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You are cherry picking markets. Japan is unique among major markets in that the population is declining, and aging, rapidly. Declined over a million people in the last 5 years. And unlike the US, Canada and Western Europe, Japan refuses to compensate by increasing immigration. And it's not just the stock market; Japanese real estate prices haven't increased in 30 years.
 
PredictorY said:
Yes, but I think most people want to make as much money as possible in a given span of time. If all you want is to better than zero, I agree that you can buy index funds and wait. Most people here, though, are seeking more than that.
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Different people trade or invest for different reasons. Being retired, I use any gains to help pay bills. I am happy with that. Short term trading has its advantages too. For one thing, you can get huge returns in a short period of time! Of course, you would pay more taxes but, if you are making more anyway, it doesn't really matter. I read somewhere that if you have around 500 trades per year that you could qualify for trader status.
 
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