Why is trading competitive?

[Mr J]

I dont think trading is competitive---well atleast from my perspective.

Might this be because you don't look the other guy in the face?

If I have a profitable system which I am using for my trading business and a process of updating and/or creating new systems as the markets change, why would it matter to me that (1) others are better capitalized, better tools, etc. and (2) my source of profits comes from someone else in the same industry.

1. Yes. The market is the sum of all action, so somehow they would be affecting your performance. I doubt most people will think about it, because we don't directly compete with most particpants.

2. So you're competing with that someone else. Competition.

Every successful trader that has posted here seems to be further proof that the competitive nature of the field is not relevant.

T/H hasn't. My own view is that we're all fighting over the some pie. Most of us are fighting over different parts, so we have few direct competitors, but ultimately we're still fighting over the same pie. I think the only reason why a trader might think it's not competitive is because they have blinders on. It's understandable when we can't see or identify an opponent, but it doesn't mean they aren't there.

The only 'thing' you are competing against when trading is yourself.

I'm sure T/H will like this. How do we only compete with ourselves? Is there no-one on the other side of the trade? No-one putting money into the market we are pulling money out of? This is the biggest game we have, how can it not be competitive?

 

[Trembling Hand]

My own view is that we're all fighting over the some pie. Most of us are fighting over different parts, so we have few direct competitors, but ultimately we're still fighting over the same pie. I think the only reason why a trader might think it's not competitive is because they have blinders on. It's understandable when we can't see or identify an opponent, but it doesn't mean they aren't there.

I think this comes from people just "hitting" buttons and you're in or out. Trade an instrument thin enough or with enough size that you have to work both entries and exits and you soon see the competitive nature of trading.

I'm sure T/H will like this. How do we only compete with ourselves? Is there no-one on the other side of the trade? No-one putting money into the market we are pulling money out of? This is the biggest game we have, how can it not be competitive?

Yep I like it.

 

[Wysiwyg]

One can say they lost on a trade because they weren't good enough, which is true. It is also true the other side was better. Not good enough or the other side better? Both are true.

I prefer the 'not good enough' approach because that is the area I can improve.

 

[Mr J]

One can say they lost on a trade because they weren't good enough, which is true. It is also true the other side was better. Not good enough or the other side better? Both are true.

I prefer the 'not good enough' approach because that is the area I can improve.

I don't agree. The other side wasn't necessarily better, for a couple of reasons. First, what was their motivation to sell? If a fund was just balancing their position, then I'd hardly call them better and a winner. The second reason is that "better" traders lose all the time. It's a game of incomplete information, so an unsuccessful trade wasn't necessarily a bad trade, and the winning trade wasn't necessarily a good trade. Plenty of bad traders win trades - does winning make those trades good? I don't think so.

 

[schnootle]

Trade an instrument thin enough or with enough size that you have to work both entries and exits and you soon see the competitive nature of trading.

I think that is exactly the point. In this case it is much more like the competing business example.

If it appears to the trader that one could buy or sell any quantity imaginable, then i think the competitiveness is less clear