Trading is NOT “free Money”
Trading the markets is easy/free money? maybe it is easy .. but it is certainly not free!
If you close a winning trade, someone else have to pay for it.
“someone” is NOT your Broker!
just like with everything else in this world, there is no difference in Trading.
if you work a 9-5, your employer pays you, the money will come out of his account and go into your account.
in other words, your employer will have a “loss” and you will have a “win”.
but instead of a “loss”, for your employer, this is just the “cost of doing business”
in Trading, however, you do not have an employer but a Broker.
the Broker provides you (among other things) the service of finding someone that will lift your offers.
some other trader will have a losing position to close, and the money of the one loss will go to your account.
if you pay for someone else’s winning trade, this is just the cost of being in the Trading business.
this can not be avoided by anyone, anywhere, EVER!
- at some stage you will have to pay someone else’s win,
your mission is to make sure it’s not too expensive. - if there is nobody buying at the price where you selling,
your Order will be filled/executed at a later price that is called “slippage”
(as stated before, the Broker will not lift your offer and pay your winnings, the market will)
Broker Related example
Let’s imagine you “trade” Fruits on the local Market, but you are not a Farmer, meaning you buy the Fruits from a Farmer in order to re-sell it. that will make you a Broker and in the case of the local market, you will be a Market maker too since there is no Zentralized exchange that tells us the current price of yours Fruits.
your objective is NOT to get rich quick by selling your fruits at the highest price as fast as possible.
your objective is to minimize the risk and try to sell ALL your fruits by the end of the day, as they will go bad overnight and you will have to throw them away.
throwing them away is just the same as closing a losing trade.
selling Fruits or trade the markets, at some stage there will be a leftover which you paid for already by purchasing it. and you have to throw them out (realize a loss) just as in the FInancial markets, there is no way to predict how many customers will buy your stuff at the current day.
This i like. Thanks!
Good stuff 🙂