Hello everyone.
I am new here and new to forex too.
I wanted to know that if an person registers with a broker,and starts trading forex.He is a billionaire,maniac.
If he starts with $1 Billion and generates 1000 pips in 3 months and has bet $1 million(with the required margin) on a currency.So that means $1 million X 1000 pips= $1 billion.
This way if he makes $100 billion in 6 months on 1000 trades after winning, losing and winning.
Although this cannot happen,but what if it does.How will the broker pay him.
So far I know, Brokers have liquidity providers backing them. The way brokers can pay 1000 dollars, it can pay any amount! The problem is trade have to occur, i.e. if he buys any pair worth $1 Billion, there have to be people/institutions/big boys will to sell that pair worth the same! So if there is no such sell order, the buy order will not be filled! If filled, broker can pay as the liquidity providers are there facilitating the trade.