Quote from: societyagrees on February 21, 2012, 10:01 pmQuote from: pine on February 19, 2012, 09:20 pmThe reason is because of the math, specifically the fundamental principal of counting. Currency speculators, on average, get zero profits from their activity. This is true, you can confirm this with any financial expert who is worth his salt. Check the records of currency of commodity speculators and on average they make inflation adjusted gains. i.e. zero real return. Minus the costs of doing the transactions, which technically makes it a negative sum game, something you don't want to be involved in.Whoa, whoa, yes that's naturally true. But that doesn't mean there aren't skilled investors who profit. There just happens to be someone who loses every time someone wins in that game. Taking an "average" of all of the "speculators" to mean that it cannot be profitable is incorrect.Yes, but there are two other laws that then come in to trip you up.The law of large numbers and the fundamental principal of counting.It gets geometrically more unlikely that you're going to experience a series of successes. Trouble is, is that the name of game of capital accumulation is compound interest. If you don't compound, you won't make any. So you can't get out of the game. People do try it. Dipping and out of the markets, market timing. But in practice they have horrible, horrible records, making far less money than the investor who merely indexed the commodity/currency/equity.This is because of Louis Bachlier's Theory of Speculation. All markets behave like Brownian Motion, they literally fluctuate randomly. It would take too long to explain it fully, but it's true.Of course you'll occasionally get big winners. But they are very very rare and in a zero sum game it is just pure luck. I'm not saying you can't make good use of commodities or currencies, because you can. Just that you're better off participating in a positive sum game if you want to accumulate capital.