Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
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 ?
Can you help answer these questions from other members on NexusFi?
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.
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.
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.
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.
