I saw that there has been a mystery and confusion from where my profit comes. Some people say that someone must lose if I want to gain profit. Is it actually true?
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I have no experience working for a broker.
My personal opinion is it really doesn’t matter where your profit comes from.
The theory that someone must loose for you to profit would assume that some other clown is trading the same size position in the opposite direction and entering and exiting in an opposite manner.
For example.
You click buy now 1 Lot. With your buy now you attach automatically a take profit order and a stop loss order.
The market moves in your favor and takes out your take profit order.
The opposite would be someone had the next 1 Lot sitting on the sell side at the price you were filled. And the market moved against them until they clicked the exit button at the exact time your take profit was filled.
So as you can see from my example this would be highly unlikely that you can say someone must lose when you win.
There is possibility that your broker may hedge your position. That is they would take your buy order and simultaneously they would enter their own buy for 1 lot to hedge their risk. Then to enable you to exit they would take your take profit order and exit their other position simultaneously.
But personally I doubt if many brokers operate like this.
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Most traders are losing money. There is no shortage of funds going into the brokerage from their losing trades to pay your profits.
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In trading, it’s not a zero-sum game. Profit can come from various market dynamics, not solely at the expense of others.
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Forex trading through a retail broker is often regarded as a zero-sum game, where the gains of one trader are balanced by the losses of another.
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Most traders end up with losses, so there are plenty of funds to go around. Like any other buy/sell situation, it is mostly and almost entirely dependent on changes in values due to whatever reasons it might be, so I would say that it is a bit obvious where your profits come from; we all know what we are getting into, right?
It is the single biggest market on the planet, and the funds and assets come in many different forms and ways. There really isn’t any reason to think about it too deeply. It is obvious that money lost in trades is a source of income for many, but it isn’t necessarily the only thing or the most contributing factor in play here. Remember, there are many huge players in here with basically unlimited resources.
No, it’s not necessarily true. The forex market is not a zero-sum game where your profit comes directly from someone else’s loss. The market operates on the principle of price movements influenced by various factors. When you make a profitable trade, it’s more a result of your analysis aligning with market movements, rather than taking money directly from another trader.