Where does the money come from? | Forex Factory

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Where does the money come from?

  • #1
  • First Post: Apr 30, 2009 2:24pm Apr 30, 2009 2:24pm
If you are a successful trader, where does all your profit come from? Does somebody else lose if you are profiting? If so then who loses: the brokers or other traders like yourself? If not then where does the money come from?
  • #2
  • Apr 30, 2009 3:19pm Apr 30, 2009 3:19pm
Quoting Le Dolce
If you are a successful trader, where does all your profit come from? Does somebody else lose if you are profiting? If so then who loses: the brokers or other traders like yourself? If not then where does the money come from?
Other Traders "Unlike" myself. That's not to say That I Haven't Paid Other Traders for ME being wrong.

The Trick is to be right most of the time or have MM in your favour.
  • #3
  • Apr 30, 2009 5:14pm Apr 30, 2009 5:14pm
From 98% of the people on FF

Seriously though Forex is 0 sum meaning for every winner there is a loser in so many words. Liquidity is provided by banks and other traders. Forex is NOT like stocks, stocks are not 0 sum as the value of a company can increase as they grow etc.
  • #4
  • Apr 30, 2009 5:20pm Apr 30, 2009 5:20pm
Quoting fxRichard
From 98% of the people on FF

Seriously though Forex is 0 sum meaning for every winner there is a loser in so many words. Liquidity is provided by banks and other traders. Forex is NOT like stocks, stocks are not 0 sum as the value of a company can increase as they grow etc.
Actually forex is a negative sum game because of the spread...
Stubbornly persistent
  • #5
  • Apr 30, 2009 5:32pm Apr 30, 2009 5:32pm
I don't know if I'm right, can someone confirm or deny this:

When you trade, you exchange one currency for another (duh).

The broker usually trades with you and takes the other side of the trade. That is, if you have USD and you want to exchange that into EUR, the broker would give you EUR and take your USD.

So if you're profiting, the broker loses and vice versa.
  • #6
  • Apr 30, 2009 5:35pm Apr 30, 2009 5:35pm
Quoting FXNewbie1
I don't know if I'm right, can someone confirm or deny this:

When you trade, you exchange one currency for another (duh).

The broker usually trades with you and takes the other side of the trade. That is, if you have USD and you want to exchange that into EUR, the broker would give you EUR and take your USD.

So if you're profiting, the broker loses and vice versa.
This is only the case in a bucketshop where most people lose anyway.
  • #7
  • Last Post: May 2, 2009 6:54pm May 2, 2009 6:54pm
I don't know the answer to this question, because it is question I have asked myself and others quite often.

But usually at the end of each thinking session, my trading session usually goes much worse. This is because by nature, I am a logical person, and usually have a need to understand the workings of the process of what I am doing. But, because I have never been able to get a satisfactory answer to how the forex market actually operates, all I get is fear after trying to understand it. Fear leads to uncertainty and that leads to bad trades. Go figure http://www.forexfactory.com/images/icons/icon5.gif

I am not convinced that it is a zero sum game. Consider this: I just bought eur/usd. As a result, someone has just sold. Now, the pesron who sold, did that trade initiate a new position, or did that close a previous buy they had. If it closed their position, was that a profitable buy or a loss buy? etc etc.

So, after a lot of thinking, and trying to understand, I reached only one conclusion: who cares. Trade with confidence, discipline and good money management, and just collect the profits.

Cheers,
K.
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