I have searched endless days around the net trying to find a solid answer … but no luck so far .
Here’s the thing :
A couple of weeks ago i decided to search on the net, something along the lines of " Poker or Forex " .
The reason i made this search is clearly because of the risk factor that’s found within both situations and not because i was thinking of playing Poker (I don’t play poker).
I was absolutely stunned by the results i found from various sites. I imagined people would go crazy that someone would like to compare Poker to Forex but on the contrary , people instead spoke about the differences between with them. Long story short , they said that they are just about the same but Forex is a lot harder to learn.
So , today i was just randomly looking for jobs in my country on the net . I found that the majority of jobs available, where all Forex companies! I know for a fact there ain’t a lot of pro poker players and the majority have there day jobs and play poker part time(Hobby) and either make some but lose more.
My point is . … if people compare Poker with Forex due to risk factor of losing money … then how in gods name are there so many successful Forex companies out there making money but yet so little people making money from Poker ?
I felt bad a couple of years ago from a post i read from a guy that has been trading for like 30 years or so and I stopped studying about Forex after 6 months.He wasn’t encouraging anyone to do it and just stated that only 5% in the world make a living off Forex.
I was bummed out because I always believed that Forex may have the risk factor but using proper tools and with constant education and practice , you can manage to minimize the risk and maximize your profits(like any other kind of business out there) .
What am i missing here ? Maybe the Forex companies make money some other way? Like maintaining Forex accounts for traders but they don’t trade themselves?
Ok so I will try and keep this brief for simplicity sake.
The majority of retail traders (small fry like you, me and everyone else on this forum) fail at making money in the forex market you will hear that the fail rate is somewhere between 80% - 95% and it is certainly somewhere within that range.
Forex Companies (Brokers) make their money from you failing. basically there is no central market for Forex so in a lot of cases when you take a position with a broker you are generally entering a bet with that broker as to whether price will go up or down. If you take point 1 into consideration it is easy to see how they make their money. (Forex brokers who target large speculators and big commercial companies will work slightly differently but for now I think you are wandering about the retail side of things)
Forex companies (those that are advertising positions) are generally crappy companies who are trying to make a quick buck off of you. e.g. they may ask you to pay them for training (could be in the thousands!) and then ask you to prove yourself for x amount of months before they take you on board. What they teach is nothing new and is generally regurgitated generic rubbish about technical trading. They basically make their money from the ‘training’ that they offer you.
There are a number of reasons why people fail in forex. it could be poor risk management, over trading, letting losers run, cutting winner short, not education oneself properly, not understanding the markets, become thrill seekers in the markets leading to bad mistakes. the list is pretty much endless.
Breaking it down. To be a successful poker player you need few things, you need to understand the odds of winning a hand giving what you have in your hand and other information available and you need to be completely unemotional about your bets. The same really applies to the forex market, you must understand what is going on in the markets (from a technical and/or fundamental viewpoint) you must also learn to become completely unemotional about your losses and winnings and you need to devise a good strategy that works for you and that you can have faith in seeing it out.
The guy you mentioned above is probably pretty much right. so many people fail in the markets. If any one of my friends came up to me and told me they were interested in getting into the forex market then I would tell them not to bother as well.
However if you are really interested in persuing things further then I believe that in order to give youreslef a decent shot then you must do the following.
Learn risk management. Get solid risk rules behind you at the end of the day this is your last defence from going bust.
Listen to everyone but do NOT take anybody’s words as truth. The fact is that even though 90% of people fail in the forex market 100% of the people you meet or speak to will be successful. People naturally don’t want to go round telling everyone how bad a trader they are so instead they shout about their winnings and keep their losses to themselves (which generally outweigh their winnings) that is not to say that these people can not provide you with decent information. Even if that information is to just trade in opposite direction to them
Read, learn, educate yourself, there is tons of literature out there all of which has various ideas and so on. The thing to do is to soak it all up and then concentrate on finding the thigns that you are comfortable with and devising a trading strategy from there. And keep on learning, never quit trying to better yourself.
I think ill give it a fair shot this time around … and educate myself and find whats comfortable for me .
Its a shame though that Forex also looks like a way of gambling. But at the end of the day … any business you start , whether its a convenience store or shoe shop … you can still go broke if e.g you dont open in a appropriate areas … .prices not reasonable … no advertising etc
After reading your post it made me realize that its just another form of business, but there are ways to bust your business, a lot faster then any other businesses:) and vice versa
Another point I’d like to contribute- because I’m one of those people that feels good gambling and good trading are identical to one another- is that the market for forex is much, MUCH bigger than that of gambling. When the average person hears “currency exchange” they start thinking of economics and finance. When they hear “poker or gambling”; they’re just picturing some people sitting around a table playing cards. They don’t take into account what separates GOOD gambling from just throwing your money on the table and hoping for the best.
In poker; you play the optimal hands and fold out of the suboptimal. You do the same with taking trades or pulling out. Money and risk management is the same. You strike while the iron’s hot or you just sit tight and wait. They use many of the same principles of psychology- but they do not necessarily share the same potential for earning power.
To put it another way- poker is to forex as fishing is to commercial fishing. They use the same principles (throwing an object like a single hook or trawling net into the water to catch fish) but have extremely different outcomes.
Eh, not really. What I’m saying is that for every 1 poker player there is probably 1,000 institutions or people trading forex (a completely arbitrary number meant only for example). The forex market pushes about $4 trillion in transactions worldwide a day. Poker and forex are similar in risk and money management; and that’s about where it ends.
You could potentially make a hell of a lot more with forex; but when you trade you don’t want to focus on that. If you do, then you’ll wind up with unrealistic expectations and make bad choices to try and attain them. It all depends on your risk appetite.
Well Forex trading is not just about the risks that are associated but more than that it is overall approach to trading that you take and how well you are able to manage your accounts
Solid knowledge of Forex isn’t enough to make a lot of money. However, depending on what you mean with “Solid knowledge of Forex” it might not be necessary at all.
One key difference between poker and forex is how easy it is to sustain account growth (in percentages).
In forex you can sustain your growth much longer. What slows down growth in forex is smaller leverage (as your account grows you generally have acess to smaller and smaller leverages) and liquidity issues. If you happen to encounter 2nd issue you are already very wealth man. Leverage can make difference in growth, but as long as you have like 10+ leverage it might not make a big difference. So… in forex you have a system … and you just use it over and over again.
In poker it is not so easy. As you move to to table with higher stakes you will also meet taugher opposition …and it is certainly not enough to just employ your system… it is also necessary to adapt to your opponents style, know pretty much everything about that game in detail. Same with “liquidity issues” in poker… i don’t think you will find many players if any who will be willing to play with blinds in thousands.
I get it … I was watching a video yesterday on youtube about the different pairs and how some pairs (generally the Yen) fluctuates very aggressively and not a good place to start off. So you can approach each pair differently and the strategy won’t change. Whereas in Poker… its constantly changes each bracket you move up.
What I meant by “solid” is having good knowledge about forex in general and a proper strategy(that works) that suits your trade style.
Interesting discussion. I do not think that forex trading and gambling are identical at all. I do play poker every once in a while, sometimes I make it to the final table and cash out and yes it is nice to kill a few hours with fun on the weekend. I do trade forex for a living every day and it is nothing alike, but that is just my opinion. I am able to generate weekly profits which makes me feel very comfortable about my strategy. When it comes to Poker, in most cases I do not cash out but then again I do not play poker for a living and those who do would disagree with my point here.
Its actually interesting that you raise this issue. I have been playing poker for around 2 years and made a lot of money on it. I have been learning from pokerstrategy, probably you know this website. Anyway the same company has released a trading school now called tradimo. There are a lot of similarties when it comes to poker & trading. They also have some articles about playing poker and trading at the same time.
Anyway I think nowadays its too tough to play poker as people are getting better and better, and when it comes to trading you “only” have to beat the market and your opponents don’t get better when you bet more money like playing higher stakes in poker.
My understanding of Tradimo is that they have entered the Forex education world more because of their “educational platform” or online service than the similarities that may existing between poker and trading. They have been very successful using their platform to offer training resources about poker (and several other subject matters), and I’m guessing that they hope to do the same with Forex. I haven’t used their poker strategy website, so I’m not sure how successful members have become because of their offerings. This is only my opinion, looking in from the outside world.
