Is trading always a zero sum game

godfather

Well-Known Member
#12
This is a basic question and I thought it would have been discussed within the forums but after more than 20 minutes of searching I have not been able to find any related discussion so summoning up the courage to ask this basic question. Is trading always a 0 sum game? In other words, as an individual trader, is my real goal to outsmart the person at the other end of the trade?

From what I understand, long-term investing is not a zero-sum game because ultimately the companies that one invests in will produce goods or services of value and that will increase their stock price intrinsically.

But I'm not sure about frequent trading or day trading? Click put in to
:) Or you can say this as"Survival of the Fittest"...You may win once or twice with Luck but not always...Is trading a 0 sum game? it depends on context...It will be too biased if I say Nothing is Fair in the World. It all depends on personal opinion. I still remember once a friend told me " Its not fair to do any stock market activities, U are taking money from someone blah blah blah... I just asked him only one question Did u lose money in Market:D obviously his answer was yes...What should I tell him? Nothing its his decision to participate in market...and now to move on with negative remark...Did i lose money...yes so many times..and still :lol: but now i know how to recover it..or to improvise.
Its for you to decide Zero sum game or the smartest person who know HOW MONEY WORKS IN THIS WORLD.

Enjoy Life...Love yourself...then love who ever you want.


PS: Just personal POV.
 
#13
There are lots of strategies in Forex Trading, you cannot depend on just one all the time, you need to change it on the basis of the Market Situation to survive in Forex Market.
 

mohan.sic

Well-Known Member
#14
Thank you for your responses. So then is it fair to say that when I am learning trading, I'm basically trying to learn how to outsmart other people.

This is what I have a hard time understanding. Let's say there are hundred people in the entire stock market. If all hundred try the same strategy, then it becomes worthless. So ultimately the winners have to come up with some confidential strategy of their own. And it is then a never-ending game because people will keep on innovating and it is essentially trying to beat each other.

Yes investing can also be considered as a zero-sum game as has been explained in one of the responses. the same time, I understand it more as a way of lending your capital with the risk and hoping that someone else is able to make a better value out of that. In contrast, in the trading, it seems to me that we are just trying to exchange money between each other and the smarter and lucky person will get money from the less fortunate person.

I don't think its fair when you say trader's learn to outsmart others.
Traders learn to understand and make money.
You may imply the motive as 'outsmarting'. But the motive is only Money.
 
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newtrader101

Well-Known Member
#15
I don't think it's really outsmarting. They would've lost the money anyway. Say somebody inherited huge wealth, but he is lazy, in-disciplined, not constantly trying to improve (no hunger), and also pleasure-loving. How long do you think the money will remain with him?
 

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