Understandably, around the world everyone wants to make money, enough to put them and their loved ones out of misery and penury. Surprisingly, knowing the difference between trading forex or gambling has become one a very important topic you will ever read about in the trading business.

Perhaps, you are wondering why it is so important. Because this is the area that most new traders skip right over before venturing into the Forex market and subsequently crash out. However, for traders that have endured long enough, they get to realize it after they have lost fortunes of their lives savings.

Note the difference, if you trade Forex, you will treat it as a business and manage the risk exposure by applying risk management, but if you gamble Forex, you are betting. When you bet, you are not analyzing risk but staking your money on the probability of chance.
While novice traders simply pick out the amount of money they are willing to lose in one trade, then they hit the button and go, they celebrate their gains as good trades and mourn their loses. Prevalent this trend of Forex trading as it seems, this is known as gambling Forex.

Are you gambling Forex?

Yes, it is gambling when one treats the Forex market like a huge Jackpot machine or Roulette table where the hopes of winning is dependent on nothing else but pure luck and chance. The problem with casino gambling is that the odds are stacked heavily against the gamblers. In Forex trading, the trader needs only to overcome the odds of a few Pips spread payable to the broker before he/she can attempt to make a profit. Trading “blindly” in the Forex market with no plan or strategy will cause the Forex gambler so to speak to lose money just like any game of chance. The consequence is worsened when the Forex gambler does not apply stop losses in his trading.

May I ask you, “Is Forex trading gambling?
No. It is not gambling when you treat the Forex market like any other business or profession where opportunities can be seized can risks can be mitigated. The difference between the Casino and the Forex market is that most are games of chances with the former versus a contest of strategy for the later.

Unlike a game of chance, the Forex trader can only rely on price patterns and analysis to decide on the opening and closing of a trade position with the possibility of winning in his favor. A Forex trader can easily slip into a Forex gambler when he or she lets his emotions especially after a trade loss to dictate his actions to trade impatiently and illogically.

The simple answer is that in this business, money is made by learning to control the risks involved (your potential losses).

When trading without any risk management, you are actually betting your money. You’re not thinking about the long term, just the short term payout. You may win the “jackpot” a few times but in the long run, you will lose like most gamblers do. Risk management not only protects your bankroll, but it can make you a very profitable trader over the long term.

If you’re not buying what I’m selling, have a look at this example: There are thousands upon thousands of people who travel to Vegas each and every year to gamble their money, hoping to win big. Some of them do win. It makes you wonder how casinos are still in business if people are “winning big”.

The answer to that question is that casinos make more in the long term from losers, than they ever pay out to winners. If you have ever heard the term “the house always wins” – that is essentially what it means. Casinos understand how to use risk management, and they are milking thousands of gamblers every single year. They are extremely wealthy statisticians and they always come out in the lead.


Remember TREEP - Trade | Entry & Exit Limit | Position for Profit

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