My career is in banking and trading, its nearly impossible for the layperson to understand. It takes people in the business years to understand and that’s usually just one niche of products.
That said the simplest answer is this: the market is your sole driver of credit. If businesses do not have access to credit they will fold.
From mom and pop to major corporations, all of them are living on loans. When the loans dry up, rates go up, or there’s simply no money to loan, the “economy” will tank. Nobody is sitting on liquidity, they are all leveraged into the machine that is the market.
Being rich on your balance sheet does NOT mean you have bank accounts full of money.
I worked for a guy who had in the past worked in commodity trading. He said he worked in it for years and most people don't get it.
The weirdest thing is, my dad ran a small concession stand decades ago and never used debt to fund it. Probably why he never got too far ahead in it (and closed due to massive overregulation.)
Yup - you know what you trade and only trade what you know. A very niche market and very niche products within that market.
If you’re trading stocks the whole derivative and commodity market is basically a black hole. You spend as much brain power and time on what you’re actually trading, theres no time or care to learn other products and markets
It’s also been this way since before we had electricity. The market is older than mass power. I know people don’t like or agree with markets but it’s such a foundation of everything we have it’s pointless to worry about changing it.
It’s 100 years old, it’s not going anywhere and the products themselves grow each year. It’s getting larger and more complicated there is no going back
Why does trading go up and down almost everyday? I check stock indices daily, sometimes several times a day. For example, they were all up last night. As of 10am this morning, all down. Do events in the news cause this? What is it?
Most traders aren’t trading daily, they’re running a strategy that is likely independent of media. Their strategy is set in place and they run it, trading when certain triggers occur.
Nobody can tell us why the market went up or down, it would take months of research to unwind one days activity and “why” may never be clear.
The financial shows are still tv shows. Same with news. They can’t flat out say they have no idea what happened today, so they pay someone to say stocks rose on x of stocks fell on y. It doesn’t really matter bc there’s no accountability and traders themselves don’t look at media for their analysis anyway. It’s for the lay person to hear but is mostly entertainment and not facts.
Saying a cause of trading an hour after the market closes is like saying why a plane crashed an hour later. It takes months or years to fully understand a plane crash and the market is far more complicated.
My career is in banking and trading, its nearly impossible for the layperson to understand. It takes people in the business years to understand and that’s usually just one niche of products.
That said the simplest answer is this: the market is your sole driver of credit. If businesses do not have access to credit they will fold.
From mom and pop to major corporations, all of them are living on loans. When the loans dry up, rates go up, or there’s simply no money to loan, the “economy” will tank. Nobody is sitting on liquidity, they are all leveraged into the machine that is the market.
Being rich on your balance sheet does NOT mean you have bank accounts full of money.
I worked for a guy who had in the past worked in commodity trading. He said he worked in it for years and most people don't get it.
The weirdest thing is, my dad ran a small concession stand decades ago and never used debt to fund it. Probably why he never got too far ahead in it (and closed due to massive overregulation.)
Yup - you know what you trade and only trade what you know. A very niche market and very niche products within that market.
If you’re trading stocks the whole derivative and commodity market is basically a black hole. You spend as much brain power and time on what you’re actually trading, theres no time or care to learn other products and markets
And this is not the best system we could have. The country is permanently kept in stasis by banking practices
It’s also been this way since before we had electricity. The market is older than mass power. I know people don’t like or agree with markets but it’s such a foundation of everything we have it’s pointless to worry about changing it.
It’s 100 years old, it’s not going anywhere and the products themselves grow each year. It’s getting larger and more complicated there is no going back
We've had a privately owned central bank since before there was electricity?
Eddie, serious question...
Why does trading go up and down almost everyday? I check stock indices daily, sometimes several times a day. For example, they were all up last night. As of 10am this morning, all down. Do events in the news cause this? What is it?
Most traders aren’t trading daily, they’re running a strategy that is likely independent of media. Their strategy is set in place and they run it, trading when certain triggers occur.
Nobody can tell us why the market went up or down, it would take months of research to unwind one days activity and “why” may never be clear.
The financial shows are still tv shows. Same with news. They can’t flat out say they have no idea what happened today, so they pay someone to say stocks rose on x of stocks fell on y. It doesn’t really matter bc there’s no accountability and traders themselves don’t look at media for their analysis anyway. It’s for the lay person to hear but is mostly entertainment and not facts.
Saying a cause of trading an hour after the market closes is like saying why a plane crashed an hour later. It takes months or years to fully understand a plane crash and the market is far more complicated.
A strategy. Thank you for the explanation. >😊<
Terms dont really matter. We work within the boundaries of the laws to get client returns and that’s where the job starts and ends.
If I wanted theory I’d work in a useless academic and not business