# Is day-trading not a zero-sum game in practice?

I would consider day-trading (by which I mean people sitting in front of their screens, buying and selling assets when they find it appropriate based on (to me very mysterious) indicators such as chart patterns, usually holding their positions only for one day) to be a zero sum game, in the following sense: Consider a market $$A$$ in which everyone holds their assets and there is (almost, see the footnote* below) no trading, and consider a market $$B$$ which is full of day-traders and everyone is constantly swapping assets.

In market $$B$$, nothing more gets produced/manufactured/provided to the people than in market $$A$$, and furthermore, at any given time, the assets present in market $$B$$ are identical to the assets present in market $$A$$. So the additional trading in market $$B$$, beyond what is needed for the market to be "efficient" (in some vague sense), adds no value to the market, which is why I would consider it a zero-sum game.

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• Firstly, you're right with what you say. Active traders win and lose from trading with each other. It's a zero-sum game. By definition, passive investors do not participate in this trading. Nobel Prize winner Bill Sharpe calls this truth the arithmetic of active management''. Aug 19, 2021 at 13:53