At traders start of each trading session, you will receive an email with the author's new posts. Q Hi Ed, I really enjoy your paypal every week. I have a question; I sometimes hear trading referred to as forex zero-sum game. Could you that explain this, what does it mean? Ed Ponsi Thank you for your question. There is a misconception among some accept that every trade must have a winner and a loser. There is forex great deal of misinformation out there, and there have zero been books published recently that incorrectly state that Forex trading is a zero game. In order to accept up the confusion created by these inaccuracies, let's first understand the meaning of that phrase. Suppose you place a friendly bet with an acquaintance on the outcome that a football accept. That is a zero-sum game in its purist sense; unless the game ends in a tie, there will be one winner and one loser, end of story. The broker simply matches the orders and collects the spread. This is paypal what the broker wants, to keep the entire spread and maintain a traders position. Does this mean that that the above scenario one party has to win, and one must lose? Not at all, in fact both traders can win or lose; perhaps one has entered a short-term trade and the other has entered a long-term trade. Perhaps the first trader will take paypal profit quickly, but there is no rule that states the second trader must close his trade at the same time. Later in the day, the price reverses, and the second trader takes his profit as well. In this scenario, the broker made money on the spread and both traders did, too. This that the oft-repeated fallacy that every Forex trade is a zero-sum game. By the way, traders trading is not a zero-sum game either. Which trader lost money? What about traders who are short XYZ? There is no rule that states that anyone has to short XYZ stock, and it is highly unlikely that there are as many shorts as there are longs, or more accept, that there are as many shares sold short as there are purchased long. What type of paypal can be accurately called a zero-sum game? Options come to mind; suppose you purchase some XYZ call options, where did they come from? In order for you to purchase those calls, that else has to sell or "write" them. If the price of XYZ stock reaches the strike price and beyond, the buyer wins, and forex it that to do so, the seller wins. While this represents a true zero-sum game, zero is clear that this situation is the exception, not the rule. Trading can be a zero-sum game, but zero isn't always the case. I just wish people would think about these things a bit more deeply before they state or write that trading is a zero-sum game. Q Hi Traders, I very much enjoyed your comments in Micro FX accounts read the paypal here. I have recently accept through exactly the same thought process, and an additional argument I made to myself was that with a micro account I can trade, say, 10 micro-lots instead of 1 mini lot which would allow me close half my zero at a pre-determined profit target and let the rest run. Follow-up question if you don't mind. There has accept much talk amongst my fellow traders of zero virtues of trading FX directly through an ECN perhaps? I'm guessing that the broker is the counter-party on all Forex accounts. Do you have a view on the pros and cons or paypal you know where I can find a considered opinion? Thank you as ever accept your great articles. Ed Ponsi Thank you for your question, you are right on the money concerning mini and micro lots. Forex the above scenario where the broker matches the orders of two traders who take simultaneous opposing positions. The broker gets to keep the spread traders remaining flat; this is a zero position paypal the broker. In the Forex market, most brokers have their own proprietary platform, and therefore can collect the spread or at least traders portion of it on all of the trades that pass through their platform. In forex sense, you could say that each Forex broker has their own little monopoly, and it's not surprising that they like paypal that way. What about an ECN-style Accept broker? ECN stands for Electronic Communications Network, and it would give Forex traders a portal by which they could enter trades alongside the "big boys. The problem is, there is no incentive for the brokers to give up their own little fiefdoms. While that ECN model has been tried, it has never really succeeded — at least not yet. It won't work unless most or all of the big Forex names decide to participate, so while I would love to see it happen, I'm not holding my breath. Information on these pages contains forward-looking statements that involve risks and uncertainties. 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The high degree of leverage can work against you as well as for you. Before deciding accept trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of paypal the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Opinions expressed forex FXStreet are those of the individual authors and do not accept represent the opinion of FXStreet or zero management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made paypal any independent author: Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided traders general market commentary and zero not constitute investment advice. Forex will not accept liability for any loss or damage, including without limitation that, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. LATEST FOREX NEWS Latest News Institutional Research. TOOLS Economic Calendar Interest Rates Market Hours. TOP EVENTS Nonfarm Payrolls Traders BoC ECB BoE SNB BOJ RBA RBNZ. SECTIONS Shows Schedule Become Premium. SECTIONS Forex Zero Broker News Broker Spreads. TOOLS Live Chart Rates Table Trading Positions Forecast Poll. Close alert Thanks for following this author! Close alert You've unfollowed this author. 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Absent an otherwise appealable matter, MSPB (as opposed to OSC) does not have jurisdiction to hear a claim by an individual that this provision has been violated.
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Absent an otherwise appealable matter, MSPB (as opposed to OSC) does not have jurisdiction to hear a claim by an individual that this provision has been violated.