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PureBytes Links
Trading Reference Links
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There is danger of falling out of bed in the morning.
There is danger in extracting your toast from the toaster.
There is danger in commuting in rush hour traffic.
There is danger in drinking alcohol.
There is danger in smoking cigarettes.
There is danger in trusting a mutual fund with your money.
There is danger in relying upon the TV pundits.
There is danger in crossing the street.
There is danger in operating an electric appliance.
There is danger in carrying scissors the wrong way.
There is danger in walking on an icy sidewalk.
There is danger in relying on a piece of software to execute your system
correctly.
In short, we're all adults and can do without governmental supervision if we
choose to day trade.
Do day-traders damage the market mechanisms?
No, they add liquidity.
Do day-traders hurt "investors" with a long-term view?
No, day-traders make it possible for longer term investors to exit their
positions at will.
Do day-traders manipulate the market?
No, the vast majority of day-traders don't act in concert with one another.
If they did, they still lack the necessary capital to move the market in any
significant way. Look to the large institutions who run buy and sell
programs to account for this type of price manipulation. Program trading
hurts small investors, not day-trading.
Do day-traders hurt others when they win or lose in the market?
No, individuals who day-trade are participating in the market in a
legitimate manner - for the purpose of speculation. Hedging and raising
capital are the other reasons for an organized market to exist, but these
two purposes would be much less efficient if day traders were not allowed to
add liquidity to the market.
Patrick White
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