in short, they match buyers and sellers and provide liquidity (being the other side) when necessary. The goal of a market maker is to match all his buys and sells while he is making the spread on the transactions, and he hopes to be flat daily without any directional risk.
They are not making only earing trades. Basically, they are executing other orders (getting phone calls from the clients, other banks etc) That is why to stay profitable they get management fee. In trading there are always 2 sides - winning and losing one
Thanks for all the answers, clears things up a lot. Second question, if these traders at banks don't really make money, why do they want to go to banks to put their money? I'm talking about the UHNW individuals, usually it's placed into various instruments like bonds etc, if these "traders" or private bankers really don't know shit about trading or which direction the market will go, why do they still get AUM from people? Can't these UHNW invest their cash themselves? Or is it because they want access to services I don't know about in banking? Like getting loans easier to fund their businesses?
Not all ET traders, just us mom and pop amateur retails on ET. We have to pay for their yachts and Gulfstream G650.