Where does the money come from?

I understand that your profit comes from the difference in exchange rates. But if you withdraw money from an account, who writes the check? Would the broker issue payment even on thousands of dollars? And where do they get all that money? Doesn’t need to be backed up or something? Thanks.

I hope you trust your broker. Your broker writes your check and they will cut you a million dollar check if you have it in your account. they get there money from a bank/central bank who ever they deal with. As for backed up i dont know what your talking about. You may want to learn about finance first before you try forex.

They are running a cash rich business backed up by funds from central banks. And the money comes from traders who lose money in trades, banks make it from trading as well as well as their daily bank operations. This is not a savings account system where you are making a deposit backed up by some nonsense deposit insurance. See how much money is traded and exchanged per 24 hour period in FX market first.

So is it a “zero sum game” so to speak where you gain what people lose? It’s hard for me to imagine that the trade adds value the way a job does. Or is it a way Central Banks add liquidity to their economies? Otherwise it seems like the money comes out of nowhere and to me is inflationary.

Basic finance a currency that charges interest must always inflate the currency to cover outstanding debts. The USD isnt backed by anything not gold not eggs. The money from every country thats not backed by a physical item comes from the flick of the countries finance ministry(or equivalent). Thats why a dollar in the 80’s bought more than a dollar does today. Its a slow process to observe.

The money from you . when u trade , they earn money from you spread, then when win the trade , they will deposit money for you using other people money that they losted on their every trade .