Is Forex Trading Gambling
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  1. #1

    Default Is Forex Trading Gambling

    Is Forex Trading Gambling

    First let’s look at the dictionary meaning of Trading, Gambling and, Speculation.

    GAMBLE:
    To stake or risk money, or anything of value, on the outcome of something involving chance. This usually relies purely on luck and the outcome has little or no bearing on skill.

    When in trading this is just taking a punt a guess or just hoping to have some luck.

    SPECULATE:
    To engage in thought or reflection, to meditate.

    When trading this is using all available tools to analyze the current market. To think, reflect and, theorize.

    However speculation is not set in stone and is reliant on circumstances of future events.

    TRADING:
    The act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries:

    Is Forex Trading Gambling or not you decide? 😉
    Last edited by Jess; 04-17-2017 at 06:42 AM. Reason: Advertising

  2. #2
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    Lots of previous threads here in BP where this has been discussed to great lengths; without really reaching an answer as it's very subjective.

    Just to clear up though, forex by definition, is speculation and never trading (as you never exchange anything of value, rather it is a speculative 'bet' on the direction of the market) - this part of my answer is fact rather than opinion.

    I'll leave the rest of the debate for others to decide

  3. #3
    If you play with your real money without proper knowledge then, it would be gambling for you! But for knowledgeable traders, it’s all about business! Because, they are very sure about their trading activities! Even, they trade with an impressive probability ratio! Forex trading is not buying or selling, for being a consistent performer here, traders need deep knowledge on technical and fundamental analysis! There is no connection with luck!

  4. #4
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    For me as an experienced Fx Trader, it would certainly NOT BE gambling for my own personal sake. This is because I use advance technical analysis to identify an edge in said set up. If there is enough confluence in the trade, then the law of numbers would give you an edge if you use similar parametres are used over time. And when you are consistent with your trading plan which has an edge, probability will eventually mean profits will occur.

    I casino owner has an edge of punters. Yes they take losses, but they know they have a slight edge in the games they offer and if the casino is a busy one (high volume), then the edge plays out to even greater effect and they are profitable. Even after all the $1 million spot prizes and car giveaways.

  5. #5
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    It really comes down to the individual trader. If you treat it like gambling, it's gambling. If instead you analyze the market carefully and place your trades in a reasonable manner, it's not.

  6. #6
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    Strictly speaking, trading cannot be termed gambling as it does not rely solely on luck. Activities involving reliance solely on luck include roulette, lottery etc. - no levels of skill are physically connected with the outcome.

    The appliance of any degree of skill which could affect the outcome, even by a fraction of a per cent, means we're in speculation.

    The level of interest an individual displays in answering this argument displays very little about trading (or gambling). Rather, it shows their socio/religious bias with regards achieving gains without "work", and profiting from the losses of others. No matter how long this goes on, we will learn nothing about trading from it.

  7. #7
    What I find about Forex is that as soon as its mentioned you are labeled as a gambler apposed to stock trading. As with any kind of trading there are only 2 possibilities either price will move in your favor of against.

    Other than that whether it goes for or against, a trader can hold a stock or a currency for yield or a dividend payout. This may fall under the category as investing.

    What I have found is that very new inexperienced traders that have a pc and Internet access are too quick to jump in the deep water without knowing how to keep afloat let a lone knowing how to swim.

    This however leads them to quickly accusing FX as a scam or gambling.

    Most that get into FX trading look at it as a easy way out of work like the above post suggests. As far as learning how to trade I find its more of 1st having the right mindset.

    The most successful traders i have met are those that trade with over 100k and trade as a 1:1 ratio or less, trade pairs that give only a positive yield.

  8. #8
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    Quote Originally Posted by ForexTFP View Post
    The most successful traders i have met are those that trade with over 100k and trade as a 1:1 ratio or less, trade pairs that give only a positive yield.
    How do you trade less than 1:1 - this means your 'paying' more than face value for the underlying asset/security/exchange

    Quote Originally Posted by ForexTFP View Post
    What I find about Forex is that as soon as its mentioned you are labeled as a gambler apposed to stock trading
    This is true, and something we just have to accept - although we all know the truth here.

    When you rock up in a Ferrari it soon puts all these comments to rest, this works for me anyway.

    Here, proof that I've made it

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    Last edited by RISKonFX; 04-17-2017 at 07:07 AM.

  9. #9
    By placing a 1 lot trade on $200,000 of currency. This will be trading with a leverage rate of 0.5:1

    As one full lot 0n $100,000 is 1:1

    10:1 will be 10 lots on $100,000

  10. #10
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    Quote Originally Posted by ForexTFP View Post
    By placing a 1 lot trade on $200,000 of currency. This will be trading with a leverage rate of 0.5:1

    As one full lot 0n $100,000 is 1:1

    10:1 will be 10 lots on $100,000
    This is incorrect, very much incorrect.

    1:1 on a trade with a notional value of $200,000 would require a real position size of $200,000. Hence, no leverage. The percentage movement in the market would directly correlate to your P&L 1 for 1.

    It's impossible to trade with less than 1:1

    1:1 leverage is the same as going to your bank and changing pounds for euros. If you get 1.3 euros per one GBP pound then this is 1:1 leverage (or no leverage). For the sake of an example, if you asked your bank for 0.5:1 leverage then they would give you 0.65euros per GBP pound - worse than the market rate!!

    Think about what you're saying

    Here is something that might help you, a leverage calculator. Margin Calculator | Margin Calculation | Trading Tools | FxPro
    Last edited by RISKonFX; 04-18-2017 at 01:43 AM.

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