Off Topic Posts - page 4

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Amir Yacoby
1473
Amir Yacoby  
Jean Francois Le Bas:

what about it ?

you close your buy, and there is another buyer who gets his order filled, then he closes when the price goes up.

where is the problem ? nobody loses

it's not the same person at the opening of the trade and at the close...which would be a problem if it was

First of all - take a scenario where you buy an asset with 100X levarage - and it goes down 100pips (approximately). You get margin call and wipe the account. Someone lost.

Second, I suppose what Alain hint in his response (you have to take into account all participants) the meaning is:
Lets assume a simplified market, with only two participants. You and me for the sake of the example. You buy an asset at a 30X levarage from me. I have an open sell, you have an open buy.

When you want to get out of your buy, you need to sell it back to me (as I'm the only buyer in the simplified market). 
You can do it at 3 stages:
A. On the price you bought it and I sold it to you - Then we both lose only the commissions and spreads/swaps etc. 
B. You sell it at a higher price than that you bought from me - then you are in profit and I'm in a loss.
C. You sell it at a lower price than that you bought it from me - then you are in a loss and I'm in profit.

This is simplification of what happens in the market, what you did in your example is pass the chain on to the next buyer/seller - it doesn't matter. As the total money in the market never changes - it just moves from one participant to the other - so the clear meaning is that there are only 3 outcomes: A. everyone is in break even (minus commission etc..) which is only theoretical - never really happens. B+C - someone looses someone profits.


Alain Verleyen
40781
Alain Verleyen  
Amir Yacoby:

First of all - take a scenario where you buy an asset with 100X levarage - and it goes down 100pips (approximately). You get margin call and wipe the account. Someone lost.

Second, I suppose what Alain hint in his response (you have to take into account all participants) the meaning is:
Lets assume a simplified market, with only two participants. You and me for the sake of the example. You buy an asset at a 30X levarage from me. I have an open sell, you have an open buy.

When you want to get out of your buy, you need to sell it back to me (as I'm the only buyer in the simplified market). 
You can do it at 3 stages:
A. On the price you bought it and I sold it to you - Then we both lose only the commissions and spreads/swaps etc. 
B. You sell it at a higher price than that you bought from me - then you are in profit and I'm in a loss.
C. You sell it at a lower price than that you bought it from me - then you are in a loss and I'm in profit.

This is simplification of what happens in the market, what you did in your example is pass the chain on to the next buyer/seller - it doesn't matter. As the total money in the market never changes - it just moves from one participant to the other - so the clear meaning is that there are only 3 outcomes: A. everyone is in break even (minus commission etc..) which is only theoretical - never really happens. B+C - someone looses someone profits.


Thanks Amir to express my thoughts...I am just tired to see people talk about what they don't know or don't understand as if they were detaining the ultimate truth.
Jean Francois Le Bas
1248
Jean Francois Le Bas  
Amir Yacoby:

First of all - take a scenario where you buy an asset with 100X levarage - and it goes down 100pips (approximately). You get margin call and wipe the account. Someone lost.

Second, I suppose what Alain hint in his response (you have to take into account all participants) the meaning is:
Lets assume a simplified market, with only two participants. You and me for the sake of the example. You buy an asset at a 30X levarage from me. I have an open sell, you have an open buy.

When you want to get out of your buy, you need to sell it back to me (as I'm the only buyer in the simplified market). 
You can do it at 3 stages:
A. On the price you bought it and I sold it to you - Then we both lose only the commissions and spreads/swaps etc. 
B. You sell it at a higher price than that you bought from me - then you are in profit and I'm in a loss.
C. You sell it at a lower price than that you bought it from me - then you are in a loss and I'm in profit.

This is simplification of what happens in the market, what you did in your example is pass the chain on to the next buyer/seller - it doesn't matter. As the total money in the market never changes - it just moves from one participant to the other - so the clear meaning is that there are only 3 outcomes: A. everyone is in break even (minus commission etc..) which is only theoretical - never really happens. B+C - someone looses someone profits.


your example is flawed. Of course as I said before, with only two participants there can be only 1 winner and 1 loser. But is there only two participants ??? I reiterate my affirmation : there can be absolutely no loser in the markets if both buyers and sellers buy/sell and close at the right time. The only loser is then the broker of course, which has to pay, but in the end there are so many losers that the broker will still be positive.


and what do you mean there is so much money in the markets ? I can open a 1 trillion order right at the lowest of the year and make millions that the broker will have to pay. 10 million people can do the exact same as me, and the broker will have to pay 10 Million times the profits. Then the market will be zero ? what's your understanding of the markets ??


Jeff

Amir Yacoby
1473
Amir Yacoby  
Jean Francois Le Bas:

your example is flawed. Of course as I said before, with only two participants there can be only 1 winner and 1 loser. But is there only two participants ??? I reiterate my affirmation : there can be absolutely no loser in the markets if both buyers and sellers buy/sell and close at the right time. The only loser is then the broker of course, which has to pay, but in the end there are so many losers that the broker will still be positive.


and what do you mean there is so much money in the markets ? I can open a 1 trillion order right at the lowest of the year and make millions that the broker will have to pay. 10 million people can do the exact same as me, and the broker will have to pay 10 Million times the profits. Then the market will be zero ? what's your understanding of the markets ??


Jeff

No, sorry thats not correct.
The broker can not lose, and the simplified market example ilustrates it very well.

For 2 participants market, I have 1000 USD balance and you have same balance. We both open a 1 standart usd lot (10$ per pip). This means that I open buy of 100K usd worth and so do you. But the only money in the markets is our 2000 dollars, together. The rest of the 198K borrowed to us by the broker, and he will take it back when you close your position or margin call (99K borrowed to each). So as you see, the broker can not lose.
The money in the markets that all participants brought from their own money, is the amount of money that stays in the market. It never grows(actually it decreases). Each position closing, that amount of 2000 usd is divided again between all participants. So its clear that someone must lose and the broker never loses. Even if there are a milion traders, their total sum never grows and it redivides each time they trade. So its like the kids chairs game, same participants, and same amount of money each time(actually less) so there are not enough chairs. Brokers dont donate.
And to make things even harder for traders, the amount of 2000 usd that you and I put to the market, decreases each time we open close positions because the broker takes its share.

* its enough to understand that brokers dont lose in order to see that same amount of money on same participants reshuffeled must cause losers and winners. Money is not added from 3rd party other then the traders themselves. It actually taken from the table by the broker. So if all are breakeven,no losers. Other than that, losers are a must
Jean Francois Le Bas
1248
Jean Francois Le Bas  
Amir Yacoby:
No, sorry thats not correct.
The broker can not lose, and the simplified market example ilustrates it very well.

For 2 participants market, I have 1000 USD balance and you have same balance. We both open a 1 standart usd lot (10$ per pip). This means that I open buy of 100K usd worth and so do you. But the only money in the markets is our 2000 dollars, together. The rest of the 198K borrowed to us by the broker, and he will take it back when you close your position or margin call (99K borrowed to each). So as you see, the broker can not lose.
The money in the markets that all participants brought from their own money, is the amount of money that stays in the market. It never grows(actually it decreases). Each position closing, that amount of 2000 usd is divided again between all participants. So its clear that someone must lose and the broker never loses. Even if there are a milion traders, their total sum never grows and it redivides each time they trade. So its like the kids chairs game, same participants, and same amount of money each time(actually less) so there are not enough chairs. Brokers dont donate.
And to make things even harder for traders, the amount of 2000 usd that you and I put to the market, decreases each time we open close positions because the broker takes its share.

* its enough to understand that brokers dont lose in order to see that same amount of money on same participants reshuffeled must cause losers and winners. Money is not added from 3rd party other then the traders themselves. It actually taken from the table by the broker. So if all are breakeven,no losers. Other than that, losers are a must

You're not logical. What if I make a perfect trade with that 100K borrowed (1.0 lot). I spot the bottom perfectly, without any drawdown (or very little, let's say 12 pips) and I make a 10,000 pips profit over several years. Won't the broker have to pay me $100K one day ???

YES and he lost the money he lent me

BROKER LOSES

my god can't you understand basic rhetoric ?

Amir Yacoby
1473
Amir Yacoby  
Jean Francois Le Bas:

You're not logical. What if I make a perfect trade with that 100K borrowed (1.0 lot). I spot the bottom perfectly, without any drawdown (or very little, let's say 12 pips) and I make a 10,000 pips profit over several years. Won't the broker have to pay me $100K one day ???

YES and he lost the money he lent me

BROKER LOSES

my god can't you understand basic rhetoric ?

Are you kidding? Is it me that cant understand?

Funny enough.

As you see, the broker is only connecting buyers and sellers. If you bought at the buttom, and the price goes up, it means that there are still sellers in the market, or new buyers with new money. thats why the price goes up. The price does not go up by its own, it goes up because the sellers want more and new buyers come with new money and willing to pay more. The broker will never pay you, you are totaly mis concepted. As long as those who hold a sell position remain in the market, or other buyers jump in who are willing to put new money, the price will go up. But the new money comes from new participants.

Go back to basics, as being said before, do your research.

*And what happens when you finally close the position? The broker looks for a buyer for you to be able to sell him your position. You will not be able to make the money without the final buyer willing to pay. Do you think if a buyer is not found the broker will pay you? What nonesense. The price will just go down until someone willing to pay you. Thats the market.
Jean Francois Le Bas
1248
Jean Francois Le Bas  
Amir Yacoby:
Are you kidding? Is it me that cant understand?

Funny enough.

As you see, the broker is only connecting buyers and sellers. If you bought at the buttom, and the price goes up, it means that there are still sellers in the market, or new buyers with new money. thats why the price goes up. The price does not go up by its own, it goes up because the sellers want more and new buyers come with new money and willing to pay more. The broker will never pay you, you are totaly mis concepted. As long as those who hold a sell position remain in the market, or other buyers jump in who are willing to put new money, the price will go up. But the new money comes from new participants.

Go back to basics, as being said before, do your research.

you're "right" yet you did not disprove my example

Amir Yacoby
1473
Amir Yacoby  
Jean Francois Le Bas:

you're "right" yet you did not disprove my example

* of course i did
And what happens when you finally close the position? The broker looks for a buyer for you to be able to sell him your position. You will not be able to make the money without the final buyer willing to pay. Do you think if a buyer is not found the broker will pay you? What nonesense. The price will just go down until someone willing to pay you. Thats the market
Jean Francois Le Bas
1248
Jean Francois Le Bas  
Amir Yacoby:
* of course i did
And what happens when you finally close the position? The broker looks for a buyer for you to be able to sell him your position. You will not be able to make the money without the final buyer willing to pay. Do you think if a buyer is not found the broker will pay you? What nonesense. The price will just go down until someone willing to pay you. Thats the market

and ? i already explained that : the broker will lent 100K again, so that's not coming from the seller.

Also the seller can also close his position in profit. and the next seller, and the next one, and the next one, and the next one........................ETC

and broker has to pay $100K each time


PRICE OSCILLATES
Amir Yacoby
1473
Amir Yacoby  
Jean Francois Le Bas:

and ? i already explained that : the broker will lent 100K again, so that's not coming from the seller.

Also the seller can also close his position in profit. and the next seller, and the next one, and the next one, and the next one........................ETC

and broker has to pay $100K each time


PRICE OSCILLATES
Go to basics again. I feel pitty for such brokers. The word broker doesn't come from broke (which is what he will be if follow your advice). It comes from brokerage, mediating between buyers and sellers.
Also this broker who has to pay you will do everything to fail you. 

No broker will ever pay when you close a position. He will look for seller to pay you, if not found price goes down until found or you get margin call, broker takes back his part. End of story.

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