Is Forex a zero sum game?

[philippirrip]

I heard sometime ago that forex is a zero sum game, which means that if someone earn money, another one is losing it. I also heard that, on the other hand, stock market is not a zero sum game. Is it true?

[Enivid]

That depends on what you consider a zero-sum game. In Forex, many participants "don't mind" losing (hedgers) and many participants trade out of necessity rather than for profit - retail physical currency exchanges, companies repatriating foreign profits.

Stock market has some features of a zero-sum game - when someone is buying low and selling high, his counterpart sells low and buys high.

[pipbanker]

Absolutely it is a zero sum game. For someone to win, someone has to lose. The money can only come from someone else account, you don't know who's account that was, but you are fighting to take somebody's money. That is a tough game. No everyone can manage it.

[Fxpipper]

Yes, it is a tough game and nearly everyone ends up making a whopper the first time they start out, but perseverance and hard work should see you succeed!

[11Sofiafx]

I do not agree that it is a zero sum games, o/w the forex markets would have been affected priorly by supply and demand or by s.o. buying and the s.o. else selling, but what about macro-econ factors like interest rates and unemployment rate? I guess it is a bit more complex than this definition. I myself have found my middle ground - autotrading- lesser time spent with smaller than compared to manual but secure roi.

[Fxpipper]

Originally Posted by 11Sofiafx

I do not agree that it is a zero sum games, o/w the forex markets would have been affected priorly by supply and demand or by s.o. buying and the s.o. else selling, but what about macro-econ factors like interest rates and unemployment rate? I guess it is a bit more complex than this definition. I myself have found my middle ground - autotrading- lesser time spent with smaller than compared to manual but secure roi.

What's your current ROI, if you do not mind my asking..
Just curious, to see if auto trades fare any better than manual trading.

[11Sofiafx]

Originally Posted by Fxpipper

What's your current ROI, if you do not mind my asking..
Just curious, to see if auto trades fare any better than manual trading.

I am making give or take 25% roi monthly on a 1000 usd - which within a year will account to a tripple result on my initial investment. I am sure is lower than compared to manual trading, though for me it has other major advantaGES - not being hoocked up to a pc 24/7 and the small initial investment. but on the other side, you need to be careful on the SPs to be winning all the time adn rotate constantly.

what about you? how much volume are you trading and what are your returns on that? (if you wish to share of course)

[Fxpipper]

About 22% at the moment but the account size is moderate and I use both ECN and standard accs, so doing okay for the moment. And at the moment, looking closely at futures and yet to come across any good edu resource on the same..
Hope someone will post a few edu links on futures .

And @Sofia - Do you wish to share any auto trade experiences, recommendations with others? Feel free to post on it and thanks for asking so nicely, lol

[11Sofiafx]

Futures are nice deriv to trade...I guess it is more of a trading preference myself though see forex as a much more liquid market lots of opportunities for fast cash (and I say cash here since this is what you get when you invest small initial investment). Moderate size - moderate risk!

My experience is mainly with zulutrade - meaning I follow a bunch of signals (of coarse top performers) and 'scrap' off their trading - profit or loss. sometimes I bother to custom stop/loss them (or a currency they are playing) though more or less it is going automatically. If anyone else is interested I can talk and talk about strategies with the signals but for the time being i try not to get off topic.

[Fxpipper]

Oh yes, have been interested in futures for a while now..guess what, I am yet to come across any substantial resource on it yet. Guess that just goes to show you how "liquid" the futures can be..
While your trades on zulu is automatic, how would you refine your strategy for manual trading? Do you plan to trade manually at any point in the future - since this may involve doing everything [strategy to entry/exit points] on your own? And does auto trading help you in this aspect? Just curious..lol,