The stock market is a 2 sided market. In my opinion it is the fairest market out there. Where else do you have the choice to take the buy or sell side? Can you become a seller at Walmart? No, you can just buy their products at whatever price they chose to sell you. Can you suddenly decide to be the bookie at a horse betting game? No, you can only bet. The stock market lets you take any side, and theoretically it is a fair game. No participant has any edge over the other.
Having said that, you must have heard the popular saying that the stock market is a zero sum game. i.e You make small gains over a period of few months and then you give them all up in 1 or 2 big losses. Like collecting pennies in front of a freight train. Yes, there are things like stop losses and trailing stops to prevent those large losses, but I used to get taken out way too prematurely when I used them, so I completely stopped using them.
The only way of making money in any market is somehow having an edge over the others. It is as simple as that. Now, for a small player how can you have an edge you ask? There are institutions competing against you with billions of dollars right? But trust me, being a small fish has its advantages. You can be quick and nimble. Who do you think can quickly take a trade? A guy trading 5 contracts or an institution trading 2000 contracts. There is beauty in being small, you don’t need to worry about liquidity.
In the next session, I will go into detail how can you gain an edge and how the stock market is not a zero sum game. So, stay tuned.