FOREX is not a Zero Sum Game. Trading is almost NEVER a Zero Sum Game
In a Zero Sum Game no money leaves the game unless it is won by one of the players-- so there must be at least one winner. In FOREX , money leaves the game to the spread.
This alone does not tell us weather a game like FOREX is beatable, but it is important to understand.
If you and I bet one dollar each on the flip of a coin this is a Zero Sum Game. If I make you bet $2 to win only $1 this also is Zero Sum, however, you have a negative expectation as I am paying you too little when you win.. you must lose in the long run.
Poker is a game of skill and in a game where no money is taken by the operator, or given to the dealers as tips, it would be a Zero Sum Game and the best player would have a positive expectation. In most casinos, the fee for playing, and tips to the dealer will not stop a strong player from winning.
In horse race betting, even though there is some skill, it is incredibly hard to be a winner because too much money is taken by the track- often around 18%. The causes the odds on the horses to be much lower.
Trading is almost NEVER a Zero Sum Game. One big question in each form of trading (or situation) is can a skilled trader have an advantage that is large enough, despite his costs which includes things like the spread and commissions.
In a Zero Sum Game no money leaves the game unless it is won by one of the players-- so there must be at least one winner. In FOREX , money leaves the game to the spread.
This alone does not tell us weather a game like FOREX is beatable, but it is important to understand.
If you and I bet one dollar each on the flip of a coin this is a Zero Sum Game. If I make you bet $2 to win only $1 this also is Zero Sum, however, you have a negative expectation as I am paying you too little when you win.. you must lose in the long run.
Poker is a game of skill and in a game where no money is taken by the operator, or given to the dealers as tips, it would be a Zero Sum Game and the best player would have a positive expectation. In most casinos, the fee for playing, and tips to the dealer will not stop a strong player from winning.
In horse race betting, even though there is some skill, it is incredibly hard to be a winner because too much money is taken by the track- often around 18%. The causes the odds on the horses to be much lower.
Trading is almost NEVER a Zero Sum Game. One big question in each form of trading (or situation) is can a skilled trader have an advantage that is large enough, despite his costs which includes things like the spread and commissions.
