Does trading Forex benefit anyone but yourself?

Beginner Questions
1

Hello everyone,

In seven month I’ll start at university, and since I have a huge interest in finance, trading and the financial markets in general, I’d love to study something like finance and investments.

I basically love everything about the financial world, but there’s one thing that keeps me questioning my self, whether this is the right path for me, and that is: how does trading e.g. Forex benefit to the society and in general anyone but yourself? (Besides that fact that some other trader are making money everytime you lose a trade).
What is the whole purpose of trading??? Making money for yourself and/or your employer by taking it from someone else?

I am of the understanding, that trading e.g. Forex is a 0 sum game, which means that it is always a win/lose situation. Since there’s no real product of a winning trade, I assume that everytime someone wins a trade, another one loses the same amount.

This leaves me with the view that traders (with all due respect) are kind of selfish, since their only purpose is to make money for themselves, not by benefiting someone else at the same time (by creating an actual product/service which creates a win/win), but instead the exact opposite (win/lose, where someone else loses everytime you win)

To me it all seems so egocentric, unethical and wrong. I mean, why would the world need any more Forex traders, when it instead could have more doctors, engineers, enviromental experts etc.??

I know all this sounds negative, but it bothers me so much since I’d love to be in the industry. But if me being there is only about taking from others (the market) it kinda ruins the whole point for me …

I hope you understand my whole problematic regarding trading. I think the question “Why do the world need more forex traders?” sums it up very well.

I’d love to hear your opinion on this.

I may be wrong, and if so, I’d love an explanation as to why :slight_smile:

Thanks,

Jesper

2

90% of all money out there are virtual and nonexistent, from physical point of view they are only in form of virtual shifting via network. All those money are in form of I.O.U. There’s no way you could possibly walk into the bank in Alaska and ask them for 20 billion $ in cash, because, I think, there’s no 20 bn. $ in cash in the whole Alaska. They would rather send you virtual ones.

In my point of view, commercial banks are the greediest institutions you can ever deal with. There are people who owns those banks, who never worked since they graduated, and keep buying (or hoarding) the welfare. And, for example, in my country, in the middle of the Europe, those people also owns 80+ % of press, many hospitals through the country, many shopping centers, hotels, politicians, you name it. And they do follow the trend of buying anything they seem has a value. Unstoppable.

As one saying goes: “If you want to rob the bank - make one.”

Look at Bill Gates or Mark Zuckerberg, they’ve been in media for the populism that they will “spend” money on poor people. Nope. That’s not true. They will [B]invest[/B] those money (into meds, food, technologies, whatever…) therefore they can make even more money from normal people who will pay the help for people in Africa. They are all businessmen, not Mother Teresa.

CEOs of Goldman Sachs, Merrill Lynch, Bank of America, etc. in the last financial crisis, even though they blew up the economy, they were paid high bonuses and none were imprisoned AFAIK.

As one saying goes: “Give people money and you will se their real intentions.”

I can tell, you have some background in math at least (mentioning “sum games”). And I love that you do have a morale, therefore I’m assuming you are a bit above the average with the intelligence. Do you pay the tax? Will you pay 200k, 2m, 20m in taxes in your country (and not offshoring)? If so, do you know what they (the gov’t) spend your taxes on? Imagine, if you pay 1m in taxes, that amount of money can save lives, support science, education, etc… it can make a better world, if you believe that those money really get there. It’s about the right mindset and beliefs. If you want to make 8000$/mo. in trading and call it a day, then that’s okay, you’re humble and not greedy, but there’s also a tempting side of the story - you have a opportunity to raise a lot of money and move the world the way you want.

I’ll not go into the market theory and how it works, I’m not a guru into that thing.

And yes, people need more MDs, Engineers, Scientists, but… would you rather spend your time in the most expensive cars, villas, on luxury vacations or just humble do your 9-to-5 day job and dream about those things? The most of the people would take the first option, that’s how it works. And why? Because they can’t afford to go to vacation whole years and [I]paying bills, debts take up a lot of earnings[/I]. And that’s where you get into the terms like “wage slavery”, where people are bound to work 9-to-5, without vacations, bills and debts, and it drives people mad.

It’s all about the people, the society, the greed. I take Forex trading as an opportunity to “break the wheel” and, hopefully, not fall into the debt of commercial banks.

3

There are more threads about this. Maybe it is good to do a search.

I don’t believe that it is a zero-sum game. When I buy dollars I can buy them from someone who made a huge profit and just want to step out of the trade. I take it over from that person and can make a profit to. In which case both make a profit and so it is not zero-sum per definition.

People also uy dollars physsically. They ‘pump’ money into the market but it can be profitable for them because the exchange rate is lower than normal and they can buy stuff cheaper in the countyr related to the currency.

Forex is not a closed market (total forex market), many factors apply that influence the price. It is not a close market like a casino. There is a difference.

5

You can always use the money you’ve made from forex for charity .
Be a philantropist if that’s what you want. You can be doctor or you can build hospitals, schools, sponsor a non profit charitable organisation. A rich philantropist can do more for society than just a random guy donating spare change to a charity.

Money is money. Everyone needs it in the civilised world. It’s just how you want to use it.

6

The market is functioning with you or without you. No one is forcing you to get in. People used to trade this way or that way long long time ago, so there is nothing wrong if someone is earning or losing. If you like that much to do this job and you want to feel good, may be you should share your profits with poor people for example.

7

As a bare minimum, your trading will benefit…assuming you succeed
You and your family
Your broker
The taxman
Your bank
Other traders who are encouraged by your success to succeed themselves

8

Thanks for all the great answers everyone!!

Yes money equals power, and making money by trading Forex definitely provides great opportunities to help other people by paying taxes, donating for charity etc.

It is a bit hard for me to explain my thoughts since english is not my mother language.
But yeah it seems like trading Forex does not benefit anyone but yourself. I mean, everytime I make money in Forex, some other guy lost his money in Forex. And why is it better that I have the money he lost, and not vice versa? No real product was produced, money just changed hands (zero sum game)

Doing regular business on the other hand, both parties benefit since doing business with eachother by [I]creating[/I] a serivce/product allowes this to happen.

I know this sounds harsh, but I guess that trading Forex just is an egocentric thing since it basically is about taking as much as you can from someone else. A great way to make money if you know how to do it, but yeah everytime you win it’s because someone else loses.

That is just how things are and that’s just something I have to keep in my when chosing my path :slight_smile:

Thanks again for the help and the great replies!