XMTrading: Is FX a zero-sum game a lie? Differences between theory and reality


I think that the term zero-sum game comes up often when collecting information about FX. What does zero-sum game mean? And is FX really designed to be a zero-sum game?

What is a zero-sum game?

The term zero-sum game means that the profit of the winner is equal to the loss of the loser. It is generally said that Forex is a zero-sum game because making a profit in Forex depends on someone making a loss.

There are also synonyms for this. There is a word called a plus-sum game. This means that the sum of the profits and losses of the participants in the game is positive. In other words, it can be said that it is a win-win relationship.

There is also the term negative sum game. A negative game is a game that the majority of participants lose on average. Negative sum games include so-called gambling such as pachinko and horse racing.

Is FX a zero-sum game?

For reference, the reasons why FX and stock investments are said to be zero-sum games are as follows. Financially, there is a high possibility that everyone will converge to zero. Why does it become so many? There are other people in Japan and around the world who have achieved results, but they are in the minority. Even if you perform technical analysis of the market, make calculations, and make predictions, it is not easy to make money by buying and selling. In general, even if you use maximum leverage, your assets will not increase easily with foreign exchange.

equivalent exchange

When trading forex, the principle of equivalent exchange always applies. For example, let’s say you want to buy dollars when the dollar is 100 yen. And in order to do that, if there is no one who wants to buy the yen at the same rate, the transaction will not be completed. Not only that, if you want to take a profit, you can’t take a profit unless there is someone who will do the opposite trade as well.

gain and lose

Applying the law of equivalent exchange means that if someone wins, some lose. Forex is called a zero-sum game because if the value of one currency rises, the other will inevitably fall, making it relatively plus or minus zero.

Forex reality

Even in a completely statistical analysis of FX, the term “zero-sum game” is true in theory. However, in reality, this is not the case. There are the following reasons for this. The conclusion is that there are many causes, so take proper measures and of course grow. Both contents affect short and long. Professional investors do various things to achieve significant results in day trading.

central bank intervention

Forex is subject to intervention by governments and central banks. In other words, FX fluctuates due to government intervention. In the event of a sudden depreciation of the yen, in order to prevent further depreciation of the yen, foreign exchange intervention such as the purchase of a large amount of yen by the government will be implemented.


FX is subject to tax. FX is miscellaneous income and if it exceeds 200,000 yen, you must file a tax return yourself. You can also think that FX will be a negative sum game. This is because traders are forced to bear the burden of taxes.


Most people use brokers for Forex. Brokers charge spreads and commissions immediately after opening a position. In other words, at the time of placing an order, the negative portion of the spread has already become an unrealized loss. At this point, it is already a losing trade.

Is FX a negative sum game?

I think that FX is moving in a negative sum game because there is a risk that spreads and taxes will be incurred. Therefore, the zero-sum game is a lie. Including spreads and slippages makes these markets work as negative sum games, so it is not really a zero sum game.

Recommended XM

XM was originally known as a forex company with too wide spreads. But this was only recently. Now there is an account type called KIWAMI account. The spread is very narrow and very suitable for trading. Therefore, this account type is highly recommended. Especially for those who trade in pounds, it is recommended because the spread is extremely narrow.



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