my forex profit=someone's forex loss?

[Cool Shane]

for me to make a profit does someone (or some others) have to loose money in forex?
i read this in a forum. but this doesnt make sense to me (yet).
if we take Eur/Usd
in short term the rate goes up or down not coz the factors related the countries but coz the the people doing forex right?
bulls>bears :rate goes up; when bulls close their trades the rate goes down.
bears>bulls: vicer versa
right?
so how?

 

[Cool Shane]

any forex expert?

 

[Cool Shane]

anyone

 

[llrajitha]

I haven't given it much thought really, but I don't think so. Think about it. If price goes down you sell and if price goes up you buy. It couldn't get fairer than that.

 

[Cool Shane]

I haven't given it much thought really, but I don't think so. Think about it. If price goes down you sell and if price goes up you buy. It couldn't get fairer than that.

yeah simple as that but that forum thread said forex is almost a zero sum business.
sum of money increases by a couple of billion each year but everything else is just exchanged. 99% loose and 1% make profit. (1% take the 99%'s money).

 

[llrajitha]

yeah simple as that but that forum thread said forex is almost a zero sum business.
sum of money increases by a couple of billion each year but everything else is just exchanged. 99% loose and 1% make profit. (1% take the 99%'s money).

Yes it is zero sum, there is only hype (if that's the correct term). But I honestly don't think fx is a sinister trade. For the sake of the argument; you, me and our whole family can trade and all can be profitable without any loss.

Still there is some meaning to what you are saying.

I think you are better off asking this in forexfactory. Someone would give you a much better explanation.

 

[nj542]

it is as you said..
what you win in forex is the money someone else lost and vice versa.

thats why it's called Foreign Exchange Market

 

[Cool Shane]

Yes it is zero sum, there is only hype (if that's the correct term). But I honestly don't think fx is a sinister trade. For the sake of the argument; you, me and our whole family can trade and all can be profitable without any loss.

Still there is some meaning to what you are saying.

I think you are better off asking this in forexfactory. Someone would give you a much better explanation.

Yeah correct Mate! if we trade correctly with a good knowledge of technical and /or fundamentals anyone can be profitable.
I will post there bro. thanks rep+

 

[Cool Shane]

it is as you said..
what you win in forex is the money someone else lost and vice versa.

thats why it's called Foreign Exchange Market

Yeah! "Exchange"
But can you understand this? i mean how this works?

suppose there are only 4 people trading in forex Eur/Usd
We each invest 75,000$ at 1X risk level...
Me, Mr.X, Mr.Y Buy Eur/Usd unit and at the same time You Sell it...
So if this happens, does the rate go up just to the point where Me,Mr.X and Mr.Y get 25,000$ profit each and You loose all your money? (we got your money )
Hmmm...this makes kinda sense now.
So this means in forex you will always make money if you are going along with the pack (pack of big bulls or big bears) and the worst thing you can do is trade unique!
Very interesting!
rep+ Bro!

 

[vicroads]

There are traders loosing money for sure to setoff pofit making traders, but someone's profit is never cost to single trader. They spread among other banks,financial institutions and finally retail traders like us because forex is such a large financial market in the world.

In forex market consist of around 1 to 5% retail traders and other majority is all the banks and financial institutions in the world, even a single action of these majority (Banks & financial institution) can make huge price movement resulting to wipe small retail traders. this happens due to bad leverage. But most of professional traders survive as they never over-leverage & having proper money management system.

Even I couldn't become successful trader until 4 years since starting trading. Another advice is never average a trade. this is the biggest mistake I did several time and ending up with loosing lot money. So honestly accept your lose and try for a another trade later. I am telling these, because I don't like to see people in my mother country loosing money.

 

[Cool Shane]

There are traders loosing money for sure to setoff pofit making traders, but someone's profit is never cost to single trader. They spread among other banks,financial institutions and finally retail traders like us because forex is such a large financial market in the world.

In forex market consist of around 1 to 5% retail traders and other majority is all the banks and financial institutions in the world, even a single action of these majority (Banks & financial institution) can make huge price movement resulting to wipe small retail traders. this happens due to bad leverage. But most of professional traders survive as they never over-leverage & having proper money management system.

Even I couldn't become successful trader until 4 years since starting trading. Another advice is never average a trade. this is the biggest mistake I did several time and ending up with loosing lot money. So honestly accept your lose and try for a another trade later. I am telling these, because I don't like to see people in my mother country loosing money.

Got it Mate! 100% True!
rep+
What did you mean by "Never average a trade"?

 

[yesyesyes]

There are traders loosing money for sure to setoff pofit making traders, but someone's profit is never cost to single trader. They spread among other banks,financial institutions and finally retail traders like us because forex is such a large financial market in the world.

In forex market consist of around 1 to 5% retail traders and other majority is all the banks and financial institutions in the world, even a single action of these majority (Banks & financial institution) can make huge price movement resulting to wipe small retail traders. this happens due to bad leverage. But most of professional traders survive as they never over-leverage & having proper money management system.

Even I couldn't become successful trader until 4 years since starting trading. Another advice is never average a trade. this is the biggest mistake I did several time and ending up with loosing lot money. So honestly accept your lose and try for a another trade later. I am telling these, because I don't like to see people in my mother country loosing money.

what leverage you trading? and who is the broker?

 

[Cool Shane]

By the way,
i dont think leverage is much of a problem.
25% of Forex is predicting the trend and 75% is Money management.
If you can predict really well and very accurately then no matter having a high leverage. And yes you should not "put all your eggs in one basket".
Make/copy a Good System and stick to it.
or you can play it safe and keep the trade for days and close the trade when there is a profit. personally i think this is the boring way to do forex but you will be profitable nevertheless.
i just said in a help thread that,
intelligence is the ability to predict. thats why in a IQ test we are asked to look at 3 or 4 pics and identify the pattern and predict the next pic.
so if you have a higher IQ then dont worry about having a higher leverage.

I use etoro, trade always with a leverage of 400X,
Make around 25$ (10-50$) a day, trading 25$ 400X trades. and it works for me for about a year now. started with a ultra mini account of 75$

 

[vicroads]

Got it Mate! 100% True!
rep+
What did you mean by "Never average a trade"?

Some times when we loosing a trade we feel to open another trade to the same direction thinking that price will reverse.

Lets say,,,

Buy 100,000 EURUSD @ 1.3250 and price starting to coming down against you..

@ 1.3220 = 30 pip loss (300$) open another buy order at this price and if price continue to come down...

@ 1.3200= 60+20 pip loss (800$).. now you think you never going to accept this 800$ loss( its a huge loss) and try to minimize loss by opening another buy position @ 1.3200.

most of the time we get lucky and price starting to reverse at this point and we are able to close this trade with a minimum loss or even with a good profit. ( in this example if price reverse to 1.3222, we can breakeven this trade) What happen if price go down further below 1.3200. you maximize your loss very fast until you get a margin call.

So doesn't matter how many times you win by averaging, Only one bad trade can make you cry.

cheers

 

[Cool Shane]

Some times when we loosing a trade we feel to open another trade to the same direction thinking that price will reverse.

Lets say,,,

Buy 100,000 EURUSD @ 1.3250 and price starting to coming down against you..

@ 1.3220 = 30 pip loss (300$) open another buy order at this price and if price continue to come down...

@ 1.3200= 60+20 pip loss (800$).. now you think you never going to accept this 800$ loss( its a huge loss) and try to minimize loss by opening another buy position @ 1.3200.

most of the time we get lucky and price starting to reverse at this point and we are able to close this trade with a minimum loss or even with a good profit. ( in this example if price reverse to 1.3222, we can breakeven this trade) What happen if price go down further below 1.3200. you maximize your loss very fast until you get a margin call.

So doesn't matter how many times you win by averaging, Only one bad trade can make you cry.

cheers

wow...well said Mate! Got it!
im a high risk minute trader, i close the trade usually if the rate goes 10 pips against me. i dont wait/hope for it to change. i accept i have made a bad prediction and move on. very disciplined!
You and Me are very different traders. but mindset is more or less the same!
Thanks again, cheers!