I usually post in the MTT forums cause that's what I play as a hobby, but I thought I might as well post here after reading this post.

A quick background. I am a day and swing trader, I have made my living for the past 4 years doing so.

Anyways, to the question. If you have read Alexander Elder's books, he has an entire chapter on this. The Stock Market is not a Zero-Sum game, it is less than that. Brokerage commissions and SEC fees make it a losing venture unless you have an edge. This is why most traders lose. My first 9 months of trading was very difficult because I was paying my "trader's tuition" as Elder calls it. I was learning by losing. You are taking into account the fundamental aspect of the market which is, in my and many trader's opinions, irrelevant. For example, Qualcomm (QCOM) has a track record of beating the street and reporting phenomenal earnings. One earnings release QCOM beat by 15% but despite these huge numbers the stock dropped 6%. The market is based on psychology and this psychology is reflected in the charts. In the extreme long run inflation increases and the market goes up and investors seem to make money. However the Real Return (inflation adjusted return) is around flat. Therefore, (successful) traders have an enormous advantage over investors.

Another thing, your average 40-something investor who invests for retirement is putting money in stocks which he things will increase in value. Uninformed people like this don't realize that stocks include intrinsic future value. Lets say you buy Google (GOOG) because you think it has huge potential. Well guess what, so does everyone else. This potential "potential" is already factored into the stock price. Same goes for the earnings in the QCOM example earlier.

Just my 2¢

-Chris