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Originally Posted by eribrav
Ok, since I don't trade FOREX, you'll have to fill me in on one thing.
When you trade equities, it is indeed possible for "everyone" to win, in the case of all the owners of a rising stick. In the very short run, trades tend to have a winner and a loser; somebody is making money and someone else is losing. In the options market, where I also trade, it is truly a zero sum game. If I make a dollar, someone else lost it and vice versa. So can everyone win at FOREX at the same time? Isn't there always going to be a losing counterparty on the other end of your winning trade?
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This is the great thing about FOREX. Nobody loses because you are trading PAIRS of currencies (not single entities) in a market that's bigger than ALL of the other markets put together. With the advent of the internet, anyone can now do what the banks have been doing for years (with everyone's money). And it isn't a 'zero sum game'. The FOREX market is like the sea. The tide goes in, the tide goes out. Currencies go up and down, but this way you can gain either way. If it's on an up you buy, on a down you sell (effectively buying the other currency in the pair you are trading). All you pay is the spread (to the broker). At a conservative estimate, if you do 20 pips a day you can get 40%ROI per month. It's unheard of anywhere else.