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Who profits when retail traders lose?
- Thread starter Option Trader
- Start date
the person on theother trade is the market maker/broker.
Quote from Option Trader:
Especially for first year traders, there are shocking statistics regarding the percentage of retail traders who lose, and lose large amounts of money or everything.
Who is on the other side of their trades? (I have my own belief about what happens, but would like to hear your input).
the market maker controls the bid and ask thus the price.
Quote from Option Trader:
Commissions of online trading are small, & spreads can sometimes be neglible, especially if you try to buy at the bid or midpoint--so this at best explains the losses of people with small accounts. For those with larger accounts, the picture should look much better.
My observation: When a retail trader places an order, his order is noticed by someone or something as a "retail" order, and he is targeted. The question is by who?
when you see all those bid and ask orders in level 2 and no volume...those orders are orders displayed by the market maker..
Quote from Option Trader:
Especially for first year traders, there are shocking statistics regarding the percentage of retail traders who lose, and lose large amounts of money or everything.
Who is on the other side of their trades? (I have my own belief about what happens, but would like to hear your input).
that depends on your style
if your style is daytrading like scalping in the position for only minutes,,,,than low commissions would matter
as for swing traders....commissions don't matter.
if your style is daytrading like scalping in the position for only minutes,,,,than low commissions would matter
as for swing traders....commissions don't matter.
Quote from trader_david:
I would say the major loss is: commission. the more you trade, the more the brokage firms make and the exechange, they are the consistent winner. actually they like the market up/down or almost random, that way they can force out lots of trades. today this news, tomrrow the news, make you traders like sit in a hot chair.
I once was with SCottrade, they charge flat fee plus order placing fee, comapred to IB, Scottrade's fee is very high. but oddly, after I moved to IB, I find most time I was making money for IB. becuase of low commision, I traded too frequently and lost lot of money on comiision. but when I was in scottrade, since the fee is high, I traded casually, and I planned trade carefully, almost 90% time I caught big winners, still overrall I did not produce much commision.
bear in mind,,without market makers you can't really trade a lot of stocks
Quote from Option Trader:
Especially for first year traders, there are shocking statistics regarding the percentage of retail traders who lose, and lose large amounts of money or everything.
Who is on the other side of their trades? (I have my own belief about what happens, but would like to hear your input).
west coast bulldog.....yeah
I DO...........LOL
BUT REALLY WHAT ARE YOU TRADING
Futures, Stocks or Options
as we all know minus the commish. futures are all ZERO-SUM
as well as Options
Stocks are not ZERO-SUM however, I feel that markets move because they have to not because they want to, so the retail
investor/trader is always put on the wrong side or misinformed
as to what side of the market they should be on ( long-short)
so the big players can profit from the little.
( The Big Eat the Small )
They need us for there food without us they would eat each other
By the way I post S&P levels and pivots as well as breakout and breakdown targets every day on youtube
I also do vids on indicators and overall market comments
If you like here is a link
http://www.youtube.com/user/TradePilotPro
Be Careful out there
Joe Baker
BUT REALLY WHAT ARE YOU TRADING
Futures, Stocks or Options
as we all know minus the commish. futures are all ZERO-SUM
as well as Options
Stocks are not ZERO-SUM however, I feel that markets move because they have to not because they want to, so the retail
investor/trader is always put on the wrong side or misinformed
as to what side of the market they should be on ( long-short)
so the big players can profit from the little.
( The Big Eat the Small )
They need us for there food without us they would eat each other
By the way I post S&P levels and pivots as well as breakout and breakdown targets every day on youtube
I also do vids on indicators and overall market comments
If you like here is a link
http://www.youtube.com/user/TradePilotPro
Be Careful out there
Joe Baker
Quote from Option Trader:
Especially for first year traders, there are shocking statistics regarding the percentage of retail traders who lose, and lose large amounts of money or everything.
Who is on the other side of their trades? (I have my own belief about what happens, but would like to hear your input).
The folk who know what they are doing of course, that should be clear. For most newbees this market is just a breif visit the casino. Ever heard a newbee say " its like someones watching me place my trades " . The guys who have been around and survived the tuition fee are waiting to see there fear, greed & complacency, well I am at least.