Forex VS Gambling
I got an email from a Gambling site the other day (won’t mention their name), asking me whether I’d like
I got an email from a Gambling site the other day (won’t mention their name), asking me whether I’d like to promote their site on my forum. I told him he’s approaching the wrong person/site, because Forex and Gambling are two totally different playing fields. But then he replied to me trying to convince me how they’re actually very similar. That got me thinking on how to refute his ludicrous assumption based on ignorance.
So anyway, here’s a question I’d like you to think about and try to answer it if you can. Is there actually any difference between Gambling and Forex (and trading in general)? If so, what are the differences?
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Here’s some of the answers you’ll get from fx traders:
a) Forex requires skill.
b) Even though Forex takes years to master, it is possible to make a consistent income/living out of it.
c) Forex is not really “addictive”, most traders who can’t make it, usually give it up.
d) Forex is not a “game”, nor is it done “for fun”.
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And here are some of the “refutations” from gamblers:
a) Some forms of gambling require skill, such as Poker.
b) It’s also possible to make a living out of gambling.
c) Forex actually is gambling, no-one knows where price is going to head in the future.
d) Gambling is only a game if that’s how you approach it, there are many Professional Gamblers who treat it very seriously.
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Of course, these are just words from the gamblers. If you make claims, show us your proof. I’ve yet to come across a single profitable gambler!
Bottom line – the richest man in the world is a trader, not a gambler.
Forex is best compared to any other zero-sum game, including poker, futures, etc. but not vanilla “gambling” in general (casinos).
Forex traders have a failure/blow-up rate north of 90%. That pretty much mimics the results of poker players & futures traders.
If Forex is like roulette then why am I bothering with Support/Resistance!
Well seeing as markets potentially offer positions that can deliver unlimited gains to limited losses. They are not the same for that reason. You can enter a position at a very strong psychological resistance area offering you little to no loss with the potential for unlimited ROI . No form of gambling I know offers that. As for the arguement about not knowing where a market will go. There are many times you KNOW where a market will go short term based on specifically strong news reports. Entering a position KNOWING you will make a gain is something gambling doesn’t… Read more »
First thing you always do is check the definition of the word gambling. The websters dictionary states: 1. to play at any game of chance for money or other stakes. 2. to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice. In my opinion forex is not gambling because it is not a game of chance. I only place trades that I have studied and analyzed and predict the outcome to be in my favor. I have an 82 % win ratio on my trades so… Read more »
It is very interesting question. In my opinion, FX could be same as gambling if you are speculator.
But the thing is that there are not just speculators in the market(even though most of them are). One of the biggest difference between gambling and trading is that trading can be used a method to hedge, and arbitrage.
That explanation regards the purpose of players. But the real difference between trading and gambiling is the result of this act. In case of trading, it actually helps distribute resources efficeintly. But gambling has nothing to do with this.
when you trade, you have a control to cut your loss and take your winning.. in gambling simply u will win all or lose all.
I’ll agree that there are differences between trading and gambling, but there are similarities as well. You final statement about the richest man in the world being a trader is not entirely accurate. Warren Buffet is not a trader. He is a value investor. WB never buys anything with the intention of ever selling it. He buys companies because he wants an ownership stake in them. This is not trading. I know several professional gamblers. They are just like professional traders. They bet probabilities rather than possibilities. Professional traders trade based on probabilities rather than possibilities. Professional gamblers bet only… Read more »
Here in the UK if you trade forex using a spread betting account it is legally classified as “gambling”. That means that in the unlikely event that you make a profit from your trading you pay no tax whatsoever.
“Gambling” is thus more profitable than “trading”!
Jim
I have developed a trading system that takes all trading decisions without human interference. It trades a diversified basket of markets in Europe Asia and the USA, mainly on derivative markets. (Forex, Stock Indices, Government bonds, energy, metals and agricultural commodities). The work started in 1985 and has an actual track record for 3.5 years. The simulated trading indicated that one could expect, on average, to more than double one’s money every three years. Indeed the actual track record proved the expectation we made in excess of 125% in the actual trading (these results when compared on a daily base… Read more »