So, the question is about the structure of the money flow. It keeps me thinking but I can't figure it out. So, when I make a trade and it's a loss, who take that money? The broker?
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DislikedOn the same lines if you buy a house that lost value, did you 'take' the previous owner's loss as profit?Ignored
DislikedYou "do" if you sell it after it has appreciated "back to normal"?Ignored
DislikedBut you weren't the first one who sold the house to the seller in the first place to buy back at a later devalued date, the opening and closing counter parties are different.
Imagine a smooth trend on a currency pair, it can have many buyers that sell at higher prices to new buyers that sell at even higher prices, whilst continued demand drives price up and up. There are no losses to be taken. If at a later date some of the late buyers get stopped out by early sellers of a trend reversal, they are merely links in a never ending web of chains of...Ignored
Dislikedyou have to see that as an aggregate, not on an individual basis.
If market is trending up. Then the net buyers will be the winners, while the net sellers are the losers. So the net buyers' wins will be the net sellers' losses.Ignored
DislikedSo, the question is about the structure of the money flow. It keeps me thinking but I can't figure it out. So, when I make a trade and it's a loss, who take that money? The broker?Ignored
DislikedIf your broker took the other side of your trade and you lose, then your broker gets your loss, the broker is the counterpart at the opening and closing of the trade. But if your order is routed to the market and you lose, there isn't some individual entity that takes your loss, your position simply lost market value.
Countless times I've read that every loss a trader makes is gathered in profit by single other trader that takes the other side of the trade...I have no idea how that makes sense...is the counterparty in openning the trade the same...Ignored