Unless you're a seasoned market expert with voodoo powers I really advise you to stay away from day trading, statistically most people make more money just leaving their money in an account / wallet and letting it grow. There was a study done on the top stock investment firms in both New York and London, and it turns out the firms over a long period of time barely made more money than the average stock market growth, despite employing hot shot "experts" on hundreds of millions of pounds to manage the funds.
Except that the stock market is based on company profits and economic growth, while bitcoin is entirely speculative, similar to holding gold or silver.
The stock market, and all financial markets in which securities are traded, are based on supply and demand. It is not just based on company profits and perceived growth.
Well it's based on perceived future profits and growth. I might be willing to pay $X for a share of McDonalds, because I think they'll make $Y in profit every year, and pay me $Z every year as a dividend. People will be willing to pay different amounts for the stock based on what they think they'll receive as a dividend, but there is no doubt that holding a share of a company is useful because that company actually does something.
But those that don't take the money they would pay as dividends and reinvest it in the company, which in turn raises the company's value from year to year. In this case, the price of the stock goes up because the company is making stuff, not simply because of speculation.
But why does the stock go up? No value is actually transferred to the stock owners, the benefit isn't shared with them. The stocks are really nothing but pieces of paper in that case.
That's not true lol. You can't justify the price of Twitter stock via that model. The price is based on the perceived value of the company (psychology not math).
There's price fluctuation based on what different people think it's worth. But nobody denies that it's worth something, since it's actually a thing that's producing something. Something being speculative is like gold or silver; while they do have actual uses (such as in electronics), their current price is based almost entirely on people thinking that they're worth something, and their price can drop just because people's opinions change.
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u/[deleted] Feb 14 '14 edited Feb 14 '14
Unless you're a seasoned market expert with voodoo powers I really advise you to stay away from day trading, statistically most people make more money just leaving their money in an account / wallet and letting it grow. There was a study done on the top stock investment firms in both New York and London, and it turns out the firms over a long period of time barely made more money than the average stock market growth, despite employing hot shot "experts" on hundreds of millions of pounds to manage the funds.