Quote:
Originally Posted by Janabis
The overwhelming majority of retail traders get absolutely crushed by the index, and this includes traders who have been studying and trading for years. The easiest way to beat mutual funds is by reducing management fees by investing in market ETF's. Also, you seem to be confusing day-trading with investing. Value investing involves fundamental analysis and waiting months or years for your thesis to play out. Day trading is dominated by HFT algorithms that take money from retail traders who demand liquidity and are willing to pay for it.
Thanks for the reply. If that's the case, what is the incentive for the retail traders to put so much time and effort (and risk) into day trading other than over-confidence and delusion? Seems like simple value investing is insanely easier while giving yourself more time to develop capital with some other career, while on average also producing better performance. Are there some small X% of retail traders who actually are legitimately extremely successful that people aspire to? (Note that I'm seeing a lot of parallels with poker here..
)
I think I understand the difference between day trading and investing, but I'm new to all the jargon and likely not expressing myself that well. Are there people that become very good at value investing and as a result understand the markets well enough to also do some speculation with more short-term day trading stuff added to their portfolio?
Also, could you possibly expand on this and explain it further for me?
"Day trading is dominated by HFT algorithms that take money from retail traders who demand liquidity and are willing to pay for it."
Thanks for your patience, any help is much appreciated. I'm a vulnerable sponge at this point..