Is Forex a zero sum game?

philippirrip

Trader
Jan 17, 2012
1
0
12
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

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Staff member
Nov 30, 2008
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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

Trader
Jan 6, 2012
12
0
17
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

Master Trader
Oct 26, 2011
1,132
4
49
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

Trader
Sep 20, 2011
41
0
22
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

Master Trader
Oct 26, 2011
1,132
4
49
ROI?

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

Trader
Sep 20, 2011
41
0
22
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

Master Trader
Oct 26, 2011
1,132
4
49
Nice!

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
 
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11Sofiafx

Trader
Sep 20, 2011
41
0
22
Futures are nice deriv to trade...I guess it is more of a trading preference :p myself though see forex as a much more liquid market :D 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

Master Trader
Oct 26, 2011
1,132
4
49
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,
 

11Sofiafx

Trader
Sep 20, 2011
41
0
22
I have no interest to engage in manual trading....i see no need in that. most of the SPs on zulu are professionals (i mean it's obvious), so I simply follow smth already good, rather than coding and coding myself......first i dunot have the time and even if i did, I doubt i'll do it either - see no reason.
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
FYI, which traders do you follow - do you use external rating or any other specs to sort through all the traders listed there?
 

Fxpipper

Master Trader
Oct 26, 2011
1,132
4
49
O yeah! But I do wish we could have more detailed stats on the rating that will enable all the newbies to figure out who to follow..