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by imtringued
2007 days ago
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The reality is that stock market trading is like a normal business selling products except you provide liquidity instead of products. Now imagine the market you have chosen needs 1000 widgets per day. If there are competing factories in the market place that already produce 1000 widgets then your only chance of breaking into that industry is by displacing existing competitors. You need to have a better product (or what the finance guys call an "edge"). The vast majority of people don't have such a product idea. They would probably just produce the same stuff the big guys have been making and then wonder why it isn't making them a profit. The market is already saturated with those widgets and there is no need for more factories. Replace widget with liquidity and factories with traders and you should immediately see why most traders are losing money. They are operating in markets where their liquidity simply isn't needed. If you want to make money off of trading then you have to find a market with low liquidity where having more traders is actually welcome but why do hard work if you can just invest your money and still get good gains without working? |
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