Forex and Gambling The Free Online Dictionary, gives three definitions for the term to gamble; 1a. To bet on an uncertain outcome, as of a contest. The main expertise lies in Forex (currency) trading. Rolf and Moritz share their trading strategies across all timeframes. Well over 1000 people have gone through the trading education offered at Traderciety. Learn to professionally day- or swing-trade the financial markets. No forex is not at all gambling. It is like investing our money for a result. 'Those who treat forex trading as if they were in a casino will see the same long-term results as when they go to Las Vegas,' he says, adding: 'If you treat forex trading like a business, including proper money management, you have a better chance of success.' Newsweek International, March 15, 2004. Although Forex trading is gambling for the newcomer or the untrained investor, it is pure economic science for the expert's trader. Consequently, the answer to this question depends on the person who answers it and the person who is trading Forex. Is Forex gambling or finance? When people start trading Forex, their goal is to get as many payouts from their trades as possible and turn initial deposits into a massive account balance. While this is a perfectly reasonable plan, it can sometimes lead to greed. And in trading psychology, greed is one of the worst enemies of trading.
Today we are going to talk about a topic many traders will deny and it's important for you to keep on reading, especially if you feel offended or think that this article isn't about you. This article has the goal to raise awareness of negative behavioral and thought patterns. The concepts highlighted can help you identify patterns that might be holding you back from achieving success in trading.
Many people who call themselves 'traders' are operating in a gambling mindset. In the following article we condensed research findings of what defines a gambler and what it means to act in a gambling mindset.
The 4 types of gamblers
Psychology and psychological research distinguish between 4 different types of gamblers:
1) Social gambling occurs when you occasionally meet friends for a limited amount of time. Often, the gambling aspect is not as important as the social component and the bet sizes are limited.
2) In professional gambling, the gamblers limit their bets and discipline plays a very important role.
3) Problem gambling is characterized by pre-occupation (the activity takes up a lot of time), other interests become unimportant, people continue to gamble despite negative experiences, accompanied by a variety of other factors as we will see shortly.
4) Pathological gamblers deny their circumstances, they are over-confident and believe that they are in control; they believe that money will solve all their problems; they are very competitive, restless and get bored easily. Pathological gamblers are often workaholics or binge workers.
The definitions have been borrowed from Psychcentral.com. In the following article, we will focus on the problem and pathological gamblers and highlight the difference between social and professional gambling.
Gambling refers to engaging in an activity where the outcome is uncertain and where the protagonist is betting money on specific outcomes.
The problem-gambler checklist
Forex Gambling Or Investing Strategy
- Gamblers get excited by risking (substantial amounts of) money. Money is not as important anymore, but they are after the excitement and the thrill.1
- Gamblers steadily increase the amount they are willing to risk. 1
- Gambling and the gambling activity take up a lot of time and become an important role in the life of a gambler (gambling instead of spending time with family, friends and hobbies). 1
- Casual-gamblers often set a loss limit that signals to stop playing. Problem-gamblers do not stop when they lose money, but they try to recover their losses. 1
- Problem-gamblers increase the bet size to recover from losses faster. A behavior called 'chasing'. 2
- Bragging about wins, but not talking about losses. 2
- Experience mood swings – problem-gamblers feel good when winning and down when losing. 2
- Lying or secretive behavior to cover up their gambling and the amount of their gambling. 2
- Gambling with money they can't afford to lose. 3
- People have problems focusing on anything else, but gambling. 3
- Denying that they are problem or pathologic-gamblers. 3
It becomes obvious very fast why problem-gamblers should stay away from taking risks or work on their mental game – preferably by consulting professional help. If you find yourself among the descriptions above, we urge you to take a break from trading and re-think what you are doing.
Traits of a professional gambler/trader/ risk-taker
There are a few character traits and mindset-qualities that stand out for the professional gambler 3:
- The act of gambling and when to bet money is planned and based on methodical principles
- A high level of discipline and the absence of impulsive decision-making
- Does not chase losses
- Professional gamblers can evolve into problem or pathological gamblers
Further reading: In an earlier article we talked about the broker and other related research findings which observed the trading behavior of different segments of traders. The researchers identified the traders who are most likely to lose all their money and also uncovered some of the reasons behind acting within a gambling mindset.
References
1) http://www.mayoclinic.org/diseases-conditions/compulsive-gambling/basics/symptoms/con-20023242
2) http://psychcentral.com/lib/symptoms-of-compulsive-gambling/
3) http://www.stopgamblingnow.com/general_information/types_of_gamblers
Forex Gambling Or Investing For Dummies
No forex is not at all gambling. it is like investing our money for a result. 'Those who treat forex trading as if they were in a casino will see the same long-term results as when they go to Las Vegas,' he says, adding: 'If you treat forex trading like a business, including proper money management, you have a better chance of success.' …Newsweek International, March 15, 2004
Well to the uneducated person or the inexperienced forex trader, it would appear to be very easy to arrive at this conclusion, particularly if you start watching the chart of any currency pair and observe how it moves in a seemingly random fashion.
However many large financial institutions around the world, and indeed individual traders, make consistent profits from trading forex markets, so you can be pretty sure that they're not gambling away huge amounts of money every day at random.
There are of course many different ways you can give yourself an edge trading forex. The main way is of course through technical analysis. This is basically the study of charts and technical indicators to identify trading patterns and help you find potentially high probability trading positions.
They work so well because traders all over the world watch the same charts and the same technical indicators and see the same patterns repeating themselves over and over again. This allows them to take positions knowing that the price will most probably behave the same in this instance as before.
Trading Forex is a Smart Business or Investment
Is forex essentially gambling?… It can be if you have no discipline!! Forex trading should and can be all about making a smart investment, taking the time to learn a system or strategy, practice and test it.
You can make a living out of trading if you treat it like a business. There are thousand strategies out there that have been tested for years and can produce a lot of money over time if you follow the rules and never let your emotions get on the way. Casino around atlanta.
An amazing and proven strategy would be Harmonic patterns, which are geometric patterns that repeat over and over again on any price chart. Search google for it and you will be amazed by the amount of free resources to learn this strategy.
You could also treat trading like gambling, but in this case I would prefer to try gambling systems in casinos, playing roulette or blackjack for example.
I hope it helps you understand the difference. Remember that gambling is based on random outcomes in which you only can take into account a bet and your odds. In trading, you can test a system and get to know the probability, risk and outcome over time, which eliminates the randomness about it.
With both you can definitely make a lot of money, it just depends on how you want to make it and which one you feel more confortable with.
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Good luck!
