Sometimes, when we talk to someone about our job as a trader, they think that trading on the Forex market is a gambling. Because no trader can be sure what the market is going for, there are similarities between trading and gambling. However, there are ways in which traders can measure market performance and make scientific decisions about their positions. In this way, we suggest that you take into account the performance and long – term goals before you accuse a Forex trader to gamble.
Similarities to trading and gambling
Let’s take a look at the similarities in the Forex market trading and gambling. Most importantly, there is no guarantee of what the outcome will be. In both cases, participants put money into the market and hope to make a profit rather than a loss. The Swiss franc, in that sense, is no different from betting on the result of a game. You either benefit or lose money.
A professional poker player and a currency pair trader must admit that there is no way to predict the outcome of the bet or trade definitively. In both cases, these people are risking their money in hopes of making profits. Both have to realize that loss is part of the game.
Also, there are unpredictable and unavoidable events in the Forex market that have a gambling equivalent. In the financial world, an unpredictable event is the headline that destabilize the market. For example, you may get news that a country is taking military action against another country. The event will destabilize the currency market. Iraq’s invasion of Kuwait is one of its examples. As expected, this happened not only in the currency market but also the crude oil market. In the gambling world, the equivalent of this one can be “four aces” in your opponent’s hand, which is seldom seen but likely and can cause a terrible loss.
Finally, the main similarity between gambling and market transactions is that in both cases, having mental fitness and mental stability is essential. Both traders and those who gamble, they should prepare themselves for how to cope with the potential loss, not to react overly or indulge in trading and gambling.
The difference between trading and gambling
It is not to be said that there are many serious differences between trading and gambling. If you are a professional currency trader, you have strategy or a system that has positive results in the long-term. As a professional trader, you need to be careful about your business strategy and you need to know that in the market, it’s natural to experience successive losses at a time, but what is important is to make progress. But it’s not about gambling; gambling is not a scientific phenomenon, and is more tied to chance.
Also, as a professional trader, you know that there are certain conditions and incentives that will enable you to increase your capital. In addition, as a professional trader, you will never trade in inappropriate situations because you know you are losing money on these conditions. In this respect, trading with gambling has a considerable difference; trading when done right has a scientific background, but gambling is not.
Technical analysis has also made a major difference between the two because it puts a set of indicators and strategies that will help him determine when it is time to enter a position. Different games in the gambling category have different conditions but generally, dice, card games, and more than any Russian roulette, do not follow a particular thesis and strategy, for example, there is nothing called a chance chart.
The latest and biggest difference between transaction and gambling is capital management. A trader will never endanger a large amount of their capital in a deal, while those who gamble may play all their money in the game.
Is the trade a gamble? It is up to you.
Yes; the answer depends on you. For many of the traders, the trading is really a gamble as they are not based on the market analysis, which deals with the inner feelings. However, when you develop your trading strategies, dealing in the Forex market is a scientific matter that is less likely to depend on the luck, which makes it completely distinct from gambling.
The success of Forex traders and those who gamble largely depends on the control they have on them, but that similarity does not mean that dealing in the Forex market is gambling. Do you still have any way of answering this question? Please read the article more carefully, and if you still have a question unanswered, register it in the comments section so that our business experts will answer your question within the next twenty – four hours. We thank you sincerely for joining us and following the official ITBFX brokerage website as a reliable trading reference.
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