Well, the first thing that traders must realise is that Forex firms make their own markets - they make the bid - offer price to clients. They use the assumption that as most highly leveraged speculators lose then it ' s good business to take the opposite position to them.
This is done automatically, so when a client buys Dollars against the Yen, the broker sells short the Dollar. When the client covers the position ( either for a profit or loss ) the broker is taken out also. If the client wins the broker loses and vice - versa. This is how the leverage game is played.
So, who do you think usually wins in this game? No, not you. It’s the broker. It’s a statistics game and the statistics say highly leveraged speculators lose.
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