End Day Trading – Make America Great Again

Copyright by James Carlson

Ever hear of a panic on Wall Street? Or how about a major sell off of stocks that caused the stock market to crash. We cherish our ability to trade and make financial gains with the stocks we buy and sell but do we ever realize that this is an awesome responsibility? The ability to trade daily on the open market is an economic Right we Americans defend but as day traders buy and sell (sell and buy) stocks in a 24 hour time period to make a quick buck, they are undermining the capital that once made America great. This has to end if we are to Make America Great Again.

Day trading is a simple concept (one I can handle) where the same stock that is traded (bought or sold) is then traded again (sold off or bought back) within a 24 hour span of time (one day). This is not responsible trading. Responsible trading requires an investment over time; an investment that provides capital to a company is responsible for helping them meet market needs, the needs of people; investments supports a company financially for the long term. In return, the investor receives a dividend from the profits of the company they invested in as a reward for their commitment to that company.

The problem with day trading is that people use the marketplace like a casino where the game is to play against the highs and lows of the market to sell high and buy low in a short span of time (one day). The fact of this happening means that there are people who invest their money in a company for such a short period of time (one day in many instances) that it actually provides nothing for that company in terms of an investment over time. Rather, these day traders parasitically prey upon the volatility of the marketplace in order to squeeze out a sum of money over a short time (many times) without ever really making any purposeful investments.

Don’t get me wrong, there is nothing wrong with buying high or selling low. And there is nothing wrong with pulling money out of a failing company or one that has a drop in their stock value. But as everyone knows, the only real way to make money on the stock markets is to let it ride. Long term investments overcome short term fluctuations almost every time.

One of the problems with trading on an open market is that people often base their decision upon human factors more than numerical ones. People make decisions for any number of reasons, many of which can be frivolous. Many emotions are in play such as fear, greed, envy, malice, and more; these are just a few of the motivations that drive people to buy and/or to sell stock on the spur of the moment. Typically, greed is the number 1 motivator of day traders whereas hope in the future motivates the long term investor.

Day traders understand that there is risk with their strategy of trading given the market’s unpredictable volatility. Knowing this, they utilize the volatility of the market for their trading advantage but to no one else’s advantage. Does anyone consider that market volatility may or may not be caused by day trading but it is certainly exaggerated by day trading? This presents a problem when day trading actually causes emotional swings in the marketplace that otherwise would have remained stable and calm.

The sinister nature of day trading (a form of parasitic trading) is that when trouble hits our nation, the markets will take a hit as well. The response of irresponsible people is that they will sell their holdings when trouble comes, causing a panic on the exchanges. This causes a major sell off of many stocks as we have recently seen. The market respond to President Trump’s initiatives on Tariffs was to panic. No one really knows what Mr. Trump claims (almost with exclusive rights) what the impact of his Tariff policy will be. So, people respond in fear and cause a melt down of the marketplace. Trump in turn responded by lowering the heat on Tariffs and the market responded in turn as investors(?) returned to bring the market averages back up.

Did anyone who sold stock in the recent bust return to make a quick buy in the returning boon? Probably so. It is highly likely there are winners and losers in the recent exaggerated market swing as some people have likely used the ups and downs of market trading, for whatever reason, to make a capital gain without presenting any useful capital investment to the companies they bought into.*

The power of the stock market is so great that it caused President Trump to amend his Tarriff policy and reduce Tariffs across the board. The volatility of the market place was so much that even ‘The Art of the Deal’ couldn’t withstand it. Mr. Trump moved and then the market moved and recovered much of the losses experienced within a short time span. This shouldn’t be allowed to happen; and in order for Mr. Trump, or anyone else, to succeed, we need to end the parasitic practice of day trading. So much for admiring the problem. Now, let’s provide a solution.

Let’s end day trading by law. There are laws limiting real time market data and investors are often limited to gathering data from the stock exchanges that is delayed by 10 minutes or more (using real-time data to manipulate markets is clearly illegal). As such, there is further reason to provide new laws that will effectively end day trading.

Legislation could be introduced that prohibits day trading to the extent that one cannot buy and sell (or sell and buy) the exact same stock within a 24 hour period. This should reduce market volatility, increase legitimate investments for the long haul, and provide more economic stability for everyone in our nation.

This is no laughing matter. While I applaud people using their Right to Economic Happiness outlined in the Declaration of Independence, I do not applaud abusing the system that affects everyone in our nation’s economy adversely. In short, let’s permanently end day trading and in this way we can help Make America Great Again.

*Update: Adam Shiff once again is stirring the pot without any substance to back up his claims. Insider trading of the sort he is complaining about has nothing to do with reality. As such, he is muddying the waters and keeping people from seeing a clear picture of a greater problem with day trading. I urge everyone to relax and view this as an achievable goal, to reduce the needless fluctuation that occurs on the market due to day trading. We need to reduce the volatility of the marketplace while ignoring the volatility of Adam Shiff.