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is Forex a zero sum game ?
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is Forex a zero sum game ?

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is Forex a zero sum game ?

As far as I know, all the securities (stocks/futures) are all zero sum game. Not sure if commodity trading is also a zero sum. Is Forex a zero sum game too ?

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  #3 (permalink)
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At best, it's a zero sum game.

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Interesting..so price can be destroyed without anyone winning ?

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Well, the losers may not know, but the winners--banks and market makers--know.

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I do not and have not traded FX, but from what I have read from other people on the forum, I would not classify Forex as a zero sum game, I would say instead it is a losing proposition.

This is due to the wide bid/ask spreads and due to the unregulated broker markets that bet against you.

You would be better off trading currency futures, in my opinion, if you are asking the question.

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I would agree with big mike on this....
You broker will create an unfair advantage by manipulating price, making sure you don't get filled..

Thats not a zero sum game

Trading currencies on the CME would be a zero sum game.

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It comes close to a zero-sum game if you include the forex broker. The broker wins and the traders lose. So it is a losing proposition for the trader. So you need to overcome transaction fees, the spread and your trading costs.

For shorter time frames and a typical retail account the transaction cost is likely to be much higher than your edge. So even trading off a 5 minute chart has the odds against you. To trade shorter timeframes than that profitably is next to impossible.

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There's only a few forex brokers on this planet that will let you make money on Forex and that one of them is Dukascopy and I might say PFG if you negotiate good.

Because of the brokers profit this is not a zero sum market because in a zero sum market there is for every loser an even winner, in forex there is a broker in between that takes profit of the winner, so it's not 'even' anymore.

I must be doing something wrong because for me winning in Forex cash markets is possible.

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A bit OT: I've always been fascinated with economic theory and zero sum. For those who seek more brain food, I suggest reading Lester Thurow's, The Zero-sum Society.

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