Is Forex Trading Same As Gambling
Once your money is all gone, at least it was entertaining. You have to remember that what differentiates trading from gambling is being able to bend the odds in your favor. That is why, as a trader, your mindset should be akin to that of the CASINO and NOT the gambler, who merely focuses on one event (or trade) at a time. It is easy to dismiss Forex as just trying your luck at predicting, and that is what draws the idea of similarity with gambling and more likely excitement and getting rich quick! A trading gambler sees indicators and charts as measures of likelihood instead of data, so they believe that everything is left to chance.
- Since you're winning or losing money, does that mean trading is the same as gambling? Nicholas answers this common question. THIS IS WHY YOU WILL LOSE AT TRADING (Becoming a professional forex.
- Yes this is fact, actually Forex trading is not gambling but 60% people’s believe that Forex trading is just gambling. Let me explain you that usually people play Forex like gambling in which they make money and loss all. Forex is a good source to earn smart profit but need to trade in professional manner.
Why do you trade forex?
Let me guess…
Because you want to make a crapload of money and be able to buy anything you wish?
While this is a perfectly valid reason, it will most likely lead to excessive greed and ultimately lead to your trading account’s destruction.
You might as well take your money to Vegas instead, and gamble it away. Once your money is all gone, at least it was entertaining.
You have to remember that what differentiates trading from gambling is being able to bend the odds in your favor.
That is why, as a trader, your mindset should be akin to that of the CASINO and NOT the gambler, who merely focuses on one event (or trade) at a time.
Casinos are profitable year, after year, after year, despite having a business where the outcome of each card laid down, dice roll, or slot pull is unknown each and every time.
They understand the concept of probabilities and create games that put the odds in their favor–in other words, “the house advantage.”
While it is true that there will be some lucky ones that will win and walk away with millions of dollars, casinos know that if they get a large enough sample size, there will be more losing patrons than winners in the end.
Let’s take baccarat, a popular card game for high rollers, for example. The game is fairly simple. Cards are dealt to a “banker” and a “player,” and all you have to do is place a bet on either one.
Since you have equal access to both the banker and the player (you can even bet on a TIE if you want), it would seem like you essentially have a 50% chance of winning. But in reality, that’s not the case.
By tweaking the rules, like charging a very small commission or reducing the payout if the banker wins with a certain number, the odds are turned slightly in favor of the house.
It might be a very tiny advantage, anywhere from 1% to 5%, but it’s enough for the house to eventually come out on top when enough games are played.
To become consistently profitable, you have to trade like the HOUSE and play the advantage over a series of outcomes.
You can do this in a couple of ways:
First, you need to learn the market behaviors, patterns, and tendencies that could be recognized in the future and turned into trading opportunities.
This comes from reviewing price action against a framework (support and resistance, mechanical indicators, economic events, etc.), recording your observations, and then devising statistics to keep track of the different kinds of patterns or setups.
This is where keeping a trade journal becomes a necessity. Using the data from your journal, you can focus on the setups that have had higher probabilities of winning, rather than those setups that tend to lose.
Secondly, you need solid risk management. You can tilt the odds of long-term success in your favor even more if you limit yourself to setting up or taking trades that have an attractive risk-management ratio (ie. average bigger wins than losses).
The better the reward-to-risk ratio, the less often you need to win a trade.
And lastly, you can look to other traders in addition to your own analysis. The web is loaded with free economic and technical analysis content. By getting a second opinion, you make sure that you don’t fall into the “confirmation bias” trap.
Of course, these aren’t the only ways to tilt the odds in your favor. But you should always remember that you don’t have to predict exactly where the market will go; you just have to figure out where price will likely go and make the best of it if the trade goes your way.
Are You Trading Forex Or Are You Gambling?
There is a very awkward reality many traders need to face; they may not be trading at all!
Yes, certainly, there is an element of gambling. Or some may say it is flat-out gambling.
I guess I couldn’t disagree according to the definition.
The Oxford dictionary definition states:
The action of gambling money on the outcome of a race, game, or other unpredictable event.
However, I would class myself as a trader and not a gambler although I’m sure many would disagree.
I would say that after consistent gains there must be an element of predictability, right?
Forex requires a strategy, proper risk assessment, and management, yet many believe it is nothing but trying to play chances.
This creates an incorrect approach that remains embedded in their psychology and one that is difficult to accept and overcome to become consistent in gains.
Anyone can learn how to leave such a mindset. But it requires them to swallow their pride remove the ego to realise it. Don’t worry! You are about to learn how to judge your trading mindset and correct it.
How Does A Gambler Think Forex Works?
Because of the speculating nature of trading in itself, many see it as random.
It is easy to dismiss Forex as just trying your luck at predicting, and that is what draws the idea of similarity with gambling and more likely excitement and getting rich quick!
A trading gambler sees indicators and charts as measures of likelihood instead of data, so they believe that everything is left to chance. To them, a strategy is pointless in a seemingly random industry.
As such, risk management is something they do not take into account, and why would they? It would be akin to using a shield if you do not know where the strike is coming from.
For trading gamblers, Forex is more about using assistance and luck than studying, and it is easier to get on that train than taking responsibility and making a real effort to apply and learn.
How Should A Forex Trader Think?
Now, many read the previous paragraph and nodded, the idea is obvious, but others saw their eyes open. The truth is that many traders, even those with positive numbers, think that way.
Is Forex Trading Classed As Gambling
So, how should someone trading Forex see the market?
Well, the chance is always a reality. You cannot ensure that a strategy will yield a 100% chance of winning, but risk can be curbed through many methods.
Capital preservation is key
Good Forex traders realise that studying price movement and coupling market sentiment, along with fundamentals like political and economic events, is helpful for success. For real traders, Forex is a market of demand and supply, and those pinch-points are what I look out for.
In the end, you are trading a type of commodity that others want(to speculate on), so the market itself will inform you about your chances for trade depending on its situation and conditions
With that in mind, successful Forex traders design their strategy understanding how risk plays a part in trading, and they work around it through studying the market for indications in direction and remain patient for the correct conditions to present itself.
How Can You Leave Your Old “Strategy” And Embrace Real Trading?
All mistakes can be fixed by studying and taking trading as a serious career. That is why finding the right source of knowledge is critical.to understand the basis of risk and working a strategy—or if you are starting out from scratch— The Able Method course will certainly help you become the best trader you can be.
Through consistent effort and perseverance, you can be sure that you will get to the necessary point to make consistent gains Forex trading.
I know, I was once in your position! Do you want it bad enough?
Is Forex Trading Gambling In Christianity
Go to the course page here to find out more