139 What do stock day traders provide to the market?

Even within the same stock market, the ways of engaging are not uniform.
Some people assume a long timeframe, while others complete their activities within a single day.

Day traders are positioned close to that extreme.

They repeat buying and selling within short periods of time.
They capture changes in price and profit from the difference.

Looking only at this, it may seem as though they are producing nothing.

They are not providing capital to companies.
They are not involved in long-term value.

So, what are they doing?

There are always two elements in the market.
Evaluation and flow.

What is being evaluated and how.
And how much buying and selling is taking place.

The market functions when these two are present.
Day traders are primarily involved in the latter.

Creating flow (liquidity).

Being able to sell when you want to sell.
Being able to buy when you want to buy.

Maintaining that state.

By ensuring trades continue to be executed, prices do not break off.
Someone needs to be waiting.

They are taking on a part of that role.

The other thing is “judgment.”

Even within short timeframes, judgments are being made.

At what price to enter.
At what timing to exit.

The accumulation of those decisions becomes the fine movements of price.

In other words, it is a state where small evaluations are continuous.

Not a long-term premise, but a short-term balance.
That change appears directly as price movement.

At first glance, this movement looks like noise.
However, it is impossible to eliminate them entirely.

Rather, the market continues to move continuously because there are price movements born from short-term evaluations and judgments.

What becomes apparent here is not whether day traders are creating value.

It is the point that they play the role of keeping the market moving.

Those who accumulate evaluations and those who maintain the flow.
The market is built upon both of these.

What is visible from the outside is only their repeated speculative trading, but behind that, market liquidity and price formation are being supported.