Whose money did you make by speculating in foreign exchange?

"Whose money is it from speculating in foreign exchange?" Similar to such questions are who makes money from speculating in stocks, who makes money from speculating in gold, and so on.

The person who will ask this question may be a trader who is just beginning to invest. They don't quite understand the working mechanism of the investment market, so they don't understand where their lost money goes and who earns it.

Today, we will explain the profits and losses of foreign exchange speculation from several aspects, how the money came and where it went.

1. First clarify the fryingForex Platform

Why put this issue in the first place, because the true and false platforms have different capital flows and different profit models. Here we simply divide the foreign exchange platform into regular platforms and black platforms, and then explain them separately.

Formal platforms. There are many channels for speculating in foreign exchange, such as banks, brokers, etc. This type of platform belongs to the regular platform. Needless to say, banks are a sign in themselves.

Brokers are fake and black-hearted. This part lists regular platforms, which are supervised by authoritative institutions. They can check the supervision number and be affirmed by authoritative institutions.

After such platforms inject capital, investors' money enters the marketforeign exchange marketThis international platform assumes that we regard foreign exchange speculation as a game in which there are winners and losers. The winners' money comes from the losers, and the losers' money may go to the winners.

In addition, it may also be in the hands of those who need foreign currency. For example, if someone is traveling abroad or studying abroad, they will use RMB to exchange for foreign currency. The money you lose may go to these people, or it may be earned from these people. In short, it is earned from the country where the currency is issued.

Black platform. Black platform is much simpler. The money you earn is the money lost by the platform. This kind of platform is also called a gambling platform, which means that if you bet against the platform, the platform will lose money if you win, and if you owe the platform, you will make a profit.

2. Let's explain the foreign exchange market trading mechanism again

Next, we will explain in detail the whereabouts of profits and losses in foreign exchange market transactions.

The foreign exchange market is a freely convertible currency. It is a market where currencies circulate naturally, are freely convertible, and have a floating exchange rate system. There will be no fixed exchange rate. Not only retail investors from various countries around the world participate in foreign exchange market transactions, but also central banks, institutions, and so on.

Both foreign exchange traders and trade traders participate in this market. The largest number of them are retail investors, some of whom are investors speculating in foreign exchange, and some are traders who exchange foreign currencies for personal reasons.

Whether you are speculating in foreign exchange at a bank or a broker, you will encounter a term called "spread". The so-called spread refers to the price difference between buying and selling a currency pair, subtracting the buying price from the selling price. The difference is the spread of the currency pair.

You can also understand the spread as a commission, because this part of the money is handed over to the platform, and the regular platform only earns the investor's spread.

Forex speculation is actually not as complicated as many people think. In fact, it involves the exchange of currencies.

Take the euro and the dollar, for example, the exchange rate of the euro fell, and in the case of no change in the total amount of euros and dollars in the world, the wealth of euro holders shrank, and the wealth of dollar holders increased;

The part of their rise is equally divided by the part of the euro wealth shrinking, and all euro holders will bear this part of the loss, and the same is true for other currency exchanges.