Who pays you for winning trade?

Discussion in 'Trading' started by zbojnik, Dec 3, 2015.

  1. I was one time witness from what happened at a Forex desk from a very big US broker. I was surprised that in general 50% of the people went short while at the same time 50% went long. I could follow these bizar trades for a full day.
    Some went short to close a long, while others really went short. The same for longs. Holding times were very different too, so the reason to trade was different too. There are always dozens of reasons to act. And what might seem for you as a loss can in reality be a winner, and vice versa. You never know the whole story (when they got in?) so it is impossible to see who is winning and who is losing. It can even be a controlled loss that was more kind of an insurance against bigger risk.
    Don't break your head on others, break your head on your own trades. That's all that matters.
     
    #11     Dec 4, 2015
  2. donnap

    donnap

    All we do is buy and sell crap in an effort to make some money.

    You may get big enough to get on somebody's radar, but by then you'll know enough to work around it. Or if you trade an illiquid, it may be you against the MM - who will do his best to get some of your money.

    I'd focus on learning how to make money for now. Don't worry about where it cones from, you'll figure it out soon enough.
     
    #12     Dec 4, 2015
    lawrence-lugar likes this.
  3. zbojnik

    zbojnik

    ok. thanks guys.
     
    #13     Dec 4, 2015
  4. Handle123

    Handle123

    So, I once belonged to local Investment Club, always said little till 9 older members telling all they were doing some yearly trade of buying 10 contracts each of Wheat Monday after July 4th which was going to be few days. Wheat market was in a down trend, so I chirped in I was selling 90 more contracts of Wheat. They ganged up on me and saying I was going to get creamed and don't come back here with tail between my legs. Two weeks later Wheat was ten cents down, and they said them were going to buy more, LOL, I asked how much more and I matched it. Two more weeks went by and the 9 didn't show up for the meeting, Wheat had gone down 50 cents. Last time I ever told anyone I was taking other side of people I knew other than day traders.

    It does come one on one in futures contracts and if you were to pay the exchange for written contracts, it would show your name and whoever took other side. So one person profits and other losses. Stocks are different, they more arbitrary of where the money comes when you sell and except when you sell short a stock as it is one for one and if short and dividends are sent out-you have to cough that money out too.

    I believe stock brokers by law have to send orders to exchanges, I think forex can offset other orders within there own brokerage but with other traders, I don't believe they can take other sides. Brokers usually just make more on fees they charge with zero risk, better than a broker.
     
    #14     Dec 5, 2015