DarkMindFX
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The last thread mentioning this was 2013, so I am opening this new one. You guys can also comment.
Ive emailed both my forex account managers from different brokers for their anwers:
I would like you to answer the following questions:
Please explain this in simple terms, I am curious to know.
1) If I BUY EURUSD 1.00 lot, who is the one that SELL EURUSD 1.00 lot?
1.1) Will it be the broker or another retail trader?
1.2) If it is another retail trader, will the broker match us together?
1.3) If there is no retail trader that wants to SELL EURUSD at the same time with me that wants to BUY EURUSD? What will happen?
2) If EURUSD price goes up and I close the trade in profit, who has suffered the loss?
2.1) If the other retail trader or broker waits and EURUSD price falls and their order gets into profit and closes their trade with a profit, who has suffers the loss?
3) We both can profit in the above situation but who is on the losing side?
It's actually not a zero sum game. We (the traders) are ALWAYS paying for that stuff - it can be commissions, it can be spread... And of course acording to statistics 90-95% are loosing in this game. So their money are spread across the market - some part of them goes to winners, some part goes to brokers...