There are two sides to every trade!
I see tons of misinformation and bad guidance on this reddit. So I want to help people get better at trading.
In every trade there is a winner and a loser. And this is true in every trade. Someone is losing value while someone gains value.
How do we use this to make money? Imagine tom has a guitar he is willing to sell to you for 300 dollars. You dont play guitar, so you call a pawn shop and find out they'll pay 500 cash for it.
You buy it from tom for 300 and sell it to the pawnshop for 500. You just made 200 bucks being the middle man.
If you want to be a good trader, dont be tom or the pawnshop. We just funnel money from buyer to seller or seller to buyer.
This is the mindset of a pure trader. We dont care what the pawnshop or what tom is willing to pay a week or a day from now. We just see an opportunity to funnel money from one party to another and take whats leftover.
edit : as the middleman, we dont carry inventory. The pawn shop is value investors. They hold inventory for weeks and sell for higher. Tom is the retail fish stuck in a bad trade seeking liquidity.
Market makers do the same exact thing as the middleman. They dont sit on inventory, the get it and move it as fast as possible.