Is Forex Gambling? Similarities and Differences
Forex is a large market with constant price movements. Traders sell and buy currencies in a system that follows specific rules and principles. However, many people think that trading belongs to the category of gambling. And it’s not just the uninitiated who have this point of view. Some newbie traders also tend to think it’s a game. So, can we say that playing Forex is like playing roulette? If you are still wondering, “is Forex gambling” here are some answers to your questions. With this dilemma resolved, you can venture into the trades with peace of mind.
Is Forex Gambling: What’s the Reality?
People very often ask this common question: Is Forex gambling?
No, Forex trading is not a game! It has nothing in common with the game. It is better to spot a faint similarity in the worst approaches, which only beginners can adopt. If currency trading is done with reason, it becomes a speculative investment activity worthy of appreciation. The trader makes these speculations after having acquired specific skills in this regard.
Is Forex gambling: Some Evidence
There are at least three reasons why Forex cannot be considered a form of gambling.
You Have to Study.
Specifically, studying before and after starting a trading career is necessary. First, to develop a wealth of knowledge about markets, asset dynamics, charts, and indicators (analytical tools). Then, to understand how the market is changing, learn new strategies and refine your techniques.
This amount of study is missing from any gambling activity, from poker to betting (although, in some cases, research is needed).
Planning Is Essential.
Planning is an important element in Forex and online trading more generally. Having and following a plan is necessary to avoid succumbing when “the going gets tough.” The “plan” allows the trader to break free from the game’s dynamics. This attention to planning is unknown to players of any kind.
To Increase the Odds of Winning, You Have to Practice Money Management.
The corollary of all this is the practice of financial management. In expense planning, it estimates risk, the probability of losing money.
Through money management, the trader knows how much he can earn and how much he can lose. Indeed, he decides on the maximum possible loss and damages and plans the trades according to his decision.
This attention to money does not reflect gambling concerns. Players only have complete control over their capital, not their profits or losses.
Is Forex Gambling: Know if You Act Like a Casino Player
If you want to find out if you behave like a gambler, inquire yourself these queries:
- Have you ever risked more than 5% of your account?
- Are you dealing with the money you need for everyday expenses?
- Have you lost a substantial amount of money while trading?
- Are you waiting for the next big trade?
If you answered ”yes” to previous questions, chances are you are playing the Forex market like the casino. Considering your trading activity as a game, you may encounter many setbacks.
Indeed, most of those who make a profit approach it like running a full-fledged business. As a result, the luck factor has very little influence on their results, and everything is planned upstream: strategy, returns, risks, etc.
Of course, realizing that you view your trading activity as a game can be painful and difficult to change. However, this is the only way to overcome this terrible flaw. To escape this situation, it is crucial to treat your activity with the same seriousness and dedication as you would for your professional job.
Again, to succeed in the world of Forex, it is important to have a solid trading plan, and the same goes for other financial markets. To help you, here is what it should include:
- Entry and exit rules,
- Time allocated to scrutinize the market,
- The risk is taken per order,
- Money management.
- When establishing your strategy, it is essential to target achievable goals and then keep a log of your gains and losses.
Here Are Some Principles that You Can Immediately Start Thinking and Acting Like a Professional Trader:
To become a professional Forex trader, you have to create new paradigms. It will include positive habits to reinforce your winning trader mindset.
Think of trading as a full-fledged job that comes with significant liability for any loss. Maybe you have a family to support? Would you be smart to take high risks not to estimate who might affect your family’s needs? You must realize that your limit is at the emotional level. Losing control of your behaviors will surely make you lose money in Forex.
Keep a trading journal to record all previous transactions. All businesses have a record of their expenses and income. It enables them to track and measure the performance of their daily activities.
Be realistic about your income goals versus your starting capital. Don’t invest money you can’t afford to lose. The possible loss of the primary commitment should not affect your standard of living.
Is Forex Gambling? Similarities and Differences
To begin with, it is important to note that even experienced “gamers” and “wagers,” meaning individuals who make a living from online gambling and betting, employ particular tactics to achieve such levels of achievement.
They develop playing methods to which they comply meticulously to continue in their activities (this is particularly the case for poker players).
For his part, the Forex trader must imperatively create a trading strategy involving particular money management and risk management.
In addition, speculating on the foreign exchange market involves regularly learning about financial news while observing and analyzing charts illustrating current market trends. Once again, it must be emphasized that luck alone is absolutely not enough to last in Forex.
Decisions are made after careful consideration and analysis. It’s not just about betting on a winning number.
Why Is Forex Trading More than A Game?
Since casinos have a statistical advantage over players, this statistical advantage causes the house always to win.
Take the classic example of roulette, which you may have seen somewhere online. The roulette table has 36 numbers in red and black color.
Every time you bet on a red or black color, you may think you have a 50/50 chance of winning or losing.
However, casinos slip into roulette the sneaky green zero or even the green double zero, depending on where you currently reside. And that’s no longer a 50/50 chance of winning but about 47/53, and that’s the long-term statistical advantage. So, in the long run, let’s say out of 100 bets, you will only win 47 bets, and the casino will win 53.
The advantage of trading is that you can trade like a casino. Out of 47 losing trades, you can have 53 winning trades, assuming each trade has the same number of lots. Nevertheless, it all depends on your system, psychology, risk management, and profitability.
Second, you can use all kinds of tools and enhancements to help your trading become consistently profitable.
The tools you can use in trading can be a set of Expert Advisors that can trade on your behalf, so you don’t have to deal with the emotional side of a trade.
To improve your trading, you can also use indicators for your technical analysis and fundamental analysis to understand the characteristics of an instrument and gain an advantage in trading. With recent advances in technology, the benefits of trading are many.
Is Forex Gambling – Final Verdict
Many people mistakenly think that trading belongs to the category of gambling. We have to outline that it is totally false. Moreover, it is not only the uninitiated who have this received idea. Some newbie traders also tend to think it’s gambling. With this mindset, they may very quickly face disillusionment.
Of course, some can start with very good results with the famous beginner’s luck. But they quickly realize that it’s not just a question of luck and that it’s not a game. You just have to see the most successful traders but also the most copied on eToro to understand that it is not a matter of chance.
Forex trading is definitely not a game of chance. You have to learn Forex like you learn a class lesson!
Traders aren’t gamblers. People who have been speculating for a long time know this. Admittedly, chance may have a very small place in online trading, but it remains so minimal that it is negligible.
As you will have understood, before launching blindly into the Forex arena, one must know how to manage the risks one takes. So, first, carefully prepare a battle plan and stick to it. It will secure your back. And if anyone asks you if Forex is gambling, tell them NO!
Forex trading can be gambling if you treat it as such. If you don’t have a plan, strategy, or systematic approach to the market and rely only on luck, the outcome will always be a loss.
