Who Gains

[Androlen]

It is really hard to tell because it depends on which broker the trader is working with and the whole market situation. Anyway it is next to impossible to track where the money go in the forex market.

 

[sarah2701]

You can not track the exact person who is making money with your losses. Forex is a huge market, It is impossible to track each trade.

 

[Anakelv]

The broker takes your money if you lose it, and it pays your money to other trader who won the position which you have lost. It works like that. Of course, broker also get profits from traders. It gets money from commissions and other peculiarities. I believe that both traders and brokers are deserved to be paid, because both of these twon things do lots of work. Brokers provides traders with everything they need for a comforotable trading activity, while traders provide brokers with money and help brokers to attract new traffic. It's mutual merit and profit. I'm sure that everybody wins in this situation.

 

[sebking1986]

Effectively it is peer to peer. One person wins and whoever filled the initial order loses. The broker acts as middle man in this transaction.

 

[Regalm_]

Effectively it is peer to peer. One person wins and whoever filled the initial order loses. The broker acts as middle man in this transaction.

Well said!

 

[Toibit]

Effectively it is peer to peer. One person wins and whoever filled the initial order loses. The broker acts as middle man in this transaction.

This is not always the case. If a broker doesn't have approved credit lines with liquidity providers (in thi case it is called dealer) and its profitable customers earn more than its losing customers lose, the broker has to pay out the difference of its own pocket and could actually go bankrupt.

 

[JimmyRozza]

Yes it depends on the style of broker you are using, but most of the reputable ones are ECN/STP

 

[ForexTus]

This is not always the case. If a broker doesn't have approved credit lines with liquidity providers (in thi case it is called dealer) and its profitable customers earn more than its losing customers lose, the broker has to pay out the difference of its own pocket and could actually go bankrupt.

Where did you read this or get information on this?

 

[Kelemeena]

When you lose a particular deal, money goes to the broker and then the broker pays them to those ones who won the same deal which you have opened, or another one. It might be stated that there is a clear money rotation.
Broker earns money due to spreads and commissions, while all the money that rotate - go from trader to trader, every second and every closed position.
Something like that. Maybe there are other schemes of money rotation in this sphere, but I didn't hear something about other ones.

 

[pashaev]

Depends on the broker. If the broker does not hedges client orders, then the client's loss becomes the broker's profit. Statistics show that more than 90% of traders lose a deposit. The mathematical expectation is positive for this approach.