It’s widely known that most traders often think every time they place a trade, they are gambling. They associate Forex trading with luck whereby they either win or lose. The question is, is forex trading gambling? could thus be difficult to answer. But this writing will explain in details the mechanism of both activities. By the time you are done reading, you’ll decide if Forex trading is gambling or not.
Are Forex trading and gambling any different?
With gambling, you could think it’s a luck-based activity, and you have a 50/50 odds. What you do not know is that the casino is always on the verge of turning the odds to their advantage.
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Whereas, trading forex, you do not have the casino to flip the odds in their favor. Instead, you get a zero-sum game, which is determined by an individual’s conflicting interests. Everyone in the market is competing with you to get favorable market conditions for their various trades.
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What should your trading plan have?
The way it goes is simple, you just need to learn the techniques to twerk the odds in your favor. One of them is using technical analysis with various indicators, the other is devising a good trading journal. Whatever plan that you put in place should generate more payout than losses.
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Is Forex trading fraud or finance?
When you start trading forex there is a tendency that you wanted to have a massive payout from your trades. You envisioned getting lots of profit to turn your initial deposit into a huge amount. Yes, it’s a reasonable plan, but it could also breed greed. Greed is considered one of the enemies of trading, thus, it will be important that you get rid of it. Of course, you are not gambling, therefore, you should not be acting based on greed.
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There is a way greed motivates a trader to take blind chances instead of calculating their steps. Right here, is one of the reasons, you could consider Forex trading to be gambling. It doesn’t matter whether it’s slot machines, poker, or blackjack, luck and randomness are the forces for every gambling.
What then is the difference between Forex trading and gambling?
The huge difference here lies in probability, gambling houses turn the odds to their advantage over the long run. Forex Trading has no gambling houses nor casinos, instead, you are the house. And it’s in your deposition to flip the odds to your favor. No matter what you do as a gambler, the house will always be in an advantageous position. Even though you win most of the games, the casino will eventually equalize the winnings.
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Why is Forex trading not considered as gambling?
Unlike gambling, there are no casinos in Forex, your opponent is seated somewhere in his house and trading based on his interests. Trading Forex is more of a Zero-sum game where some people win and others lose. The adversary here isn’t any house nor the other players, your adversary is you. You need to think carefully before you make a decision and try not to make them based on greed.
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The biggest difference between Forex trading and gambling is that traders aren’t passive participants. This means they are not intentionally putting anyone in a worse market scenario or position. You trade by using certain tools and strategies and there is every tendency that you will dial an odd in your favor.