If they are all profitable, someone has to pay the profits. So who is paying? (Who is not as in a particular person, but who as in type of market participant).
Why Do People Trade?
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If they are all profitable, someone has to pay the profits. So who is paying? (Who is not as in a particular person, but who as in type of market participant).
Whoever it is that uses the liquidity you're providing...
Your original question is too broad. There's all sorts of people in the mkt and they do things for all sorts of reasons. Personally (and I suspect I am not alone), I trade because it is my job and my chosen profession. I do it to put food on the table.
I extract capital from pools. Why, you say?
my answer: Capital is universally recognized as a medium of exchange. Why fight city hall.
Huge amounts of capital are in pools for reasons unknown to me. Pools have market names. Drink CocaCola. I use the equivalent of a straw.
Basically an industry formed and it makes money by providing financial services. It is called "investing" by clients. They exchange money for holdings. The financial industry tells clients they are doing a service.
When you get to high school you will be allowed to look things up. So far, you haven't been exposed to doing "look ups". In college they call it doing papers. In grad school it is called research.
Now for the trading part.
Markets exist to facilitate investing. Some people can recognize how markets work. Markets actually have a system of operation.
So far you do not have a hobby apparently so you type questions in forums to start threads. I get paid to answer you. I get paid by the word as everyone knows.
Some day you will think you are smarter than the activities of the market.
Your family will give you money after you drop out of school. This will be at your request and they know they have to give you money so you will be somewhere else for as long as possible.
you will use money to have an account. Money is put into an account. It is like a permission slip to go to the toilet except it applies to a betting arrangement you are setting up. you are going to be doing betting on something happening.
Every so often your betting will be over. This is because your account got too small. You will repeat this process.
Financial advisors do this for your parents. Parents do a thing called 401. Companies give them pay checks and companies give them 401 money instead of letting them have the money as a reward for work or for retirement income from the company. Pearents choose where to bet too. Slowly they have less money because of the places the 401 was placed.
We are opposites. You bet and I listen to the market. I am told by the market what the market is doing.
I place capital in the market when the market opens; the prior day the market told me how to place the money in the market. I watch and listen (to the market) all the time. When the market tells me to, I change sides of the market. When the day margin changes to night margin, I take my money out of the market so it can sleep during the night. Because I obey what the market says when it says, I have more money each evening.
My broker tells other people what I do (in postion trading, only).
During the day I am an MAT type trader.
Here is a definition of trading: it is participating in market pools, while watching and listening to the market system of operation and doing what the market says to do.
Here is your defintion of trading: it is using money to bet on what you predict is going to happen in the future. to make it work best you calculate probabilities to do the betting. furthermore you spread out your bets down to 2% per bet that is uncorrolated with all other 2% bets as a money mangement technique. you also use a precaution for how much money you will be losing (Google "stops"). Your prediction includes how much profit you want for each bet. (google"targets"). Over time you learn that you are not good at betting your parent's gifts to you.
bighog has been watching you since you are always available to watch. He wants to save you some time.
He suggests a specific sector of hobbies: "fucking". Depending upon what grade you are in in highschool this may or may not be an elective. Ask around befoe or after classes. Girls will know about this. Teachers and counselors do not focus on this type of hobby.
Please refrain from starting any more threads. you are broadening the spectrum of ET threads always at the same end of the spectrum.
In trading no one gets paid. In trading there are accounts and they have a thingy called a statment and a balance sheet. the statment deals with two things primarily. If we tell you what they are, please do a "look-up". Two other things beside these primary things are called deposits and withdrawls.
we know you do not have an acount and we know no one at a brokerage has even spoken to you about your "experience". there is no need as they would know.
Why do they trade?
That is your reply? That is as deep as you can think? You can't come up with a coherent counter argument? All you can say is "Bullshit!" Not just bulllshit, but "total and utter". That's the best you got? Have you really thought this through? Or did I strike a nerve which caused a knee jerk reaction?
You're asking who gets left out as if the markets were a single game of musical chairs.
Try thinking of the markets as rivers of opportunities instead. There are many ways to derive profit from a river:
You can fish in the river and channel some water to irrigate a garden and feed yourself throughout the year.
You can fish in the river or irrigate a farm and sell your fish/food to others for a profit.
You can take people on river rapids day trips or camping trips.
You can conduct research at a river on behalf of a university or a foundation.
You can dam a river and generate power.
All these things are possible, yet at the same time you can get drunk while fishing, fall into the river and drown.
You can get greedy and implement a fishing method that removes so many fish from the river so quickly the population goes extinct.
You can farm too close to a river that's known to flood frequently and have your crops ruined.
Rivers of opportunity for those who prepare well and hedge their risk.
To have more money, a convenient medium of exchange.
During the day my P&L sheet gets longer and longer. I do reversals when the market sentiment changes. Simply stated it is my policy to stay on the correct side of the market.
During the day commissions are taken as I do trades. My account shrinks because of commissions being taken.
BUT, after hours "settlement" occurs. To do this correctly in this day and age, the market stops operating briefly.. Then after settlement it starts up again.
My buying power has changed. There is a reason: my account is larger.
Why does trading change the size of an account. There is only one reason: I have extracted capital from the market.
I didn't get paid. In trading in markets there are participants. All the participants have their trading accounts adjusted daily after the market closes.
Because I do not bet or use money management or have any risk and I use all of my capital, my account keeps getting bigger.
As a day goes by, I write on the chart what the market tells me. I put arrows near the ends of bars as the bar is going on (changing size at times).. When the bar gets to an extreme (the wall on the DOM) I know to change sides of the market.
This trade is called a reversal trade. As events happen I reverse over and over. Each morsel is called a profit segment.
At settlement each profit segment is taken out of the pool of capital and transferred into each of my MAT accounts.
I used to post P&L's and prints but I found out I could not explain to ET members what they said. You do not have any of those things to post. You post questions only so far.
you suggest checks get written when people trade. To me your post means you think people get paid.
You will learn about money someday. Often people use currency as a form of money. For example, during play time at school you might want a Coke or Pepsi. You reach in your pocket and find coins. You put the coin in a hole (see bighogs hobby suggestion for a similar thing going somewhere) and as the coin gets processed through AI, the machine drops a can out of its suppl hole figuratively speaking.
whats a river????
ask jem and lucrum and innersky; they may be in the group you are asking about.