it's like a lottery. In their advertisements they make us believe we had good chances to win, but they know they are lying and customers lose in average. The mere existance of the "market maker" - brokers proves it. Is it different with stock brokers ? Classically people would buy stocks and hold them for a while(years) and sell them. Customers and brokers both win(lose) in average when the economy goes up(down). But when the broker does short selling or CFDs it's almost like forex. Now, with ECN/STP it's more anonymous, someone still loses(wins) when you win(lose), it's still zero sum, but that someone sits at another broker anonymously, far away. There are also the professional players, large companies that hedge their exports, banks and people who do business in several currencies, tourists. Do those lose in average to the forex-traders ?
Possible explanation: For a broker, when you lose min 0.01lot, that broker wins privately. For ECN, when you lose min 1 whole lot, they(network of brokers) All win...bigger i.e. target larger customer fund deposits, small retail players usually not allowed.
That's true. If customers don't lose money, a currency dealer/broker will never make money. What I don't understand is that there so many morons trading currency.
forex trading is like any other trading out there, its a source of money just like any other job, but of course all trading type have risks, I've been trading forex and im actually making money out of it. the bottom line is i guess, If you are not sure of what you are doing then you don't have to do it.. speaking of brokers earning money. only market maker (MM) brokers earn if a trader loses money. but STP brokers don't earn anything from traders losing money in trades.