Forex trading vs gambling: The reasons Why they are different. Once you learn Forex further, you must realize that Forex trading is highly different to gambling. Novice traders may think that trading in foreign exchange is just like gambling at first. It is true in some cases that there is little percentage of gambling when you open a position in the market. But, we cannot deny that the two are different from each other.
The Five Reasons Why Forex Trading Different to Gambling
You might be able to familiarize yourself with the market of foreign exchange, learning the technical and fundamental indicators and some ways to avoid risk in trading Forex. However, you won’t be able to forecast perfectly how the market will go at some point. When we might meet a particular factor of gambling in this point, these two industries is still not the same.
In fact, there are some attributes that make Forex trading is not the same to gambling. In some points, these two can be the same in the mean of uncertain outcome that can be achieved. In Forex, there is no guarantee that we can achieve profit too. However, these following attributes can make a big difference between Forex trading and gambling. So, here we go!
No. 1: Numbers
Before we are talking about ethics, morals, legitimacy and legal issues, let’s just pay more attention on the reason why everyone wants to gamble or trade Forex: money. There is certainly no comparing the number of money traded everyday in the foreign exchange market to that in the gambling arena. In Forex, there are anywhere between two and three trillion dollars traded every day.
No. 2: Players
When we are talking about Forex market, this market is basically backed by the largest and most significant financial institutions around the world. It is no secret that traders tend to not trade with banks, but instead on the retail market. However, the reality that Forex market is hold up by such institutions make it much more legitimate compared to gambling world.
When it comes to world of gambling, we cannot deny that this industry always faces such challenges in front of legal field. On the other hand, Forex market is as legitimate as other financial market like commodities or stocks. Thus, if you are attracted to spend money and take risk, you would want to put it where morals and law on your side, wouldn’t you?
No. 3: Tools
Even though risk factor is something you can find straightforwardly in the Forex market, you are actually not completely in the dark when trading a position. This is because you have a lot choice of methods and techniques that can help you to avoid the risk. More interestingly, these resources have usually been researched by Forex experts who dedicate to find best Forex trading approaches.
No. 4: Emotions
One of the primary problems with gambling is that it can result in addiction. One of the reasons is because it lets people to use their emotion while they are gambling. On the other hand, in Forex trading, involving emotion has always been a big no. It is better for traders to open a position scientifically and objectively. It can prevent traders to lose money.
No. 5: Strategies
When you are gambling, you might only need to use your hunch. However, when it comes to Forex trading, you need to learn Forex trading strategies so that you are not opening and closing a position blindly. Trading blindly and without strategy has been popular as one of the main reasons many traders end up failing to get the most of Forex market.