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Comment by ivanche | Hacker News Reader

You are aware that trading is a zero-sum game and that for every winner there's a loser who took the other side of the bet?

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this is sort of a simplistic take. not everyone has the goal of making money on every single trade. say I buy some security from you, not because I expect it to go up, but because I believe it is uncorrelated with my other holdings. you realize a capital gain, and the value goes down the next day. did I lose? not really; we just had different goals.

edit: maybe a better example. I am confident in $SPCE over the next six months, and I want to open a long position. I want to slightly reduce the risk though, so I also buy an OTM put from you. $SPCE keeps going up, so the put expires worthless. we both won here. you collected the premium and I got into a long position that I wouldn't have otherwise.

Short term yes, long term no.

Care to elaborate? Are you saying that long term every trader makes money?

These stocks represent part of existing companies. If these companies do well the stockholder will/might receive extra dividends. So if you have stocks of a single company then you will make money in the long run if the company does well (and vice versa). Generally people do not trust a single company, so if you diversify (different strategies apply here) you can make your outcome dependent on a countries economy or the world economy (if the world economy does well, your portfolio will do the same)

Oh sorry, I wasn't precise enough. I meant specifically forex traders (because the article was only about forex traders). Since currencies are not cash-flow producing assets, I don't see how, on average, everybody can end in the money.

About stocks I absolutely agree - history tells us there's a long-term positive (US) market return so it's clear that an average investor should get exactly that return minus costs/fees.

This is a good point. One could argue that some people buy currency on forex to use it for a different business which gives them a gain. So your selling benifits them and you.

Long term non-trader money is also part of the market (stock buybacks, dividends).

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