Forex is not gambling

Beginner Questions
82

In your original post you didn’t mention of course it’s your opinion, you thought you doubted if you would change anyone’s mind and you thought your post might piss someone off. I assumed you were wondering if you did, so my points are:

  1. I doubt your post opinion changed anyone’s mind one way or the other.
  2. I don’t think your post will piss anyone off.
    3 your post along with the bold " …forex is gambling" might be confused with a fact, not an opinion; for example like in my answer to your original post.

I’m glad you decided to make your feeling’s known and join the debate: it’s good for newbies or less experienced traders know their are different opinions and that most things are not black and white, there’s a grey area. Again that’s just my opinion.

83

It’s really great to know all your inputs, as clint put it, forex is about risk just like gambling. However, for newbies they might have a wrong impression and lose all their investments.

84

According to me,Forex is not gamble.If traded with proper analyzes its trading and not gambling.

85

good for mate, keep up the good work!

86

But the only similarity between forex and gambling is that they are highly addictive. You just can’t take away your focus on your trading.

88

Of course it’s gambling,like everything else in life is, but here the odds can be bent to your favor!

92

I think people are mixed with Forex and gambling is because of the risk.You can earn with Forex,because it is highly possible to get high win:loss rate compared to gambling at casinos. This is because in Forex,there are more than thousands of techniques,but when gambling in casinos, you just hope for luck.

It seems to people, Forex is riskier business than others,but actually it depends.If you have enough knowledge,skills and money management you can earn Forex consistently. If you aren’t prepared, its just like opening a business without doing analysis at first about the market,scope and trend…then you have so few customers and wondered why.

93

I agree, since forex is a risky business it is quite being associated with gambling, but if we treat as an investment then the notion of gambling is erased.

94

+1

It seems to me, that people in this thread should first define what gambling actually is. From that point on, it should not be difficult to answer the question if forex is gambling.

95

gambling is a game of change, but forex is a business investment, wherein you can earn profits thru testing your strategies.

96

Just because trades at a forex broker “aren’t part of the main market,” does not make gambling or not gambling. Trading directly on the CME or stocks themselves, in a speculative way is all betting - gambling.

Is it a business? Well losers pay the winners, yet the winners tend to be the same people. So you can make it a business. Is speculation immoral? A debate perhaps. But without speculators, you can not have hedging, price discovery and good liquidity. Its part of the morality of free market capitalism. Many companies work ever day to take money from you, either to buy their product or force your labor rate down. We gamble with our career choices, businesses…yes our system is based on gambling a bit.

97

In the UK, it’s called “Spread Betting”.

I wonder why…

98

forex is gambling just for traders that do not know how to trade and how to gain pips in forex…
The best traders will said that “forex is actually not a gamble”. Most traders will said like them…

99

I agree, forex can be considered gambling for those who do not know how to trade. Forex is not a game of change but based on proven strategies.

100

I like your post and i agree with you that is also my opinion.

101

I disagree,

Where are these “proven strategies” ? (With the exception of two ideas that are in the public domain that work, I’ve never see a working strategy openly discussed anywhere)

The strategies only become “proven” with the benefit of hindsight. Therefore it’s a trivial matter to retrospectively create strategies that appeared to work in the past. you could create tens of thousands of winning strategies by back testing , but it doesn’t help in the least. Trading forums must contain hundreds of thousands of strategies proposed by traders, and yet none of them work !

I know a handful of successful forex traders, and every single one of them considers themselves to be gamblers, myself included.

The only remotely useful literature relating to trading is written by gamblers. Gamblers have far better insight into a whole host of trading related areas including risk management and psychology. Every single gambler that I’ve ever worked with had far better system development and strategy ideas than the traders I’ve worked with.

Successful gamblers and successful traders share the same traits.

Losing gamblers and losing traders also share many of the same traits.

102

I shall point out a few points before I share my views on gambling or not.

On the note of one person’s gain is another’s losses, i shall start by taking a more appropriate comparison is asking everyone “Is texas holdem a gamble or investment?”

Gambling?
Most good poker players consider it a investment of their hole cards. (the hidden 2cards). A player is required to bet(buy, bid) an amount that he is comfortable with based on his “strategy, confidence, risk tolerance” after viewing the 2 cards in hands(the only information he have)…
Makes a profit after someone folds to him or he simply having the better hand. Makes a losses by folding or simply having the weaker hand…
*note: House/casino takes commission from the winning player.
Hope I have most agree to me up to this point.

Trading Forex?
A trader is required to buy currency in speculation(hope, educated guess) of that currency out performing another. Makes a profit from selling it back when it’s in profit. Makes a loss by selling it back when it’s in losses.
*note: broker takes a cut in form of spread difference or commission.

Similarities: both entering market(betting/buying) with speculation that your investment(cards/currency) will out perform your competitor(players/currency). Its heavily relying on personal judgement/strategy. Money management, historical performance, live information, risk(tolerance and management) plays a big role to be a successful participants. Makes profit on someone elses losses and the middle man (House/Broker) takes certain pre calculated commission/cut for providing a table/platform to gamble(poker)/trade(forex) on. Winning strategies is vague and there is no position to enter with 100% profitability. All strategy are base on long term profitability with swings up n down.

now think and answer is trading a gambling game?
is poker a gambling game?

For any no reply to both qn above, read on

You are right. trading is investment (an educated, proper and respected channel to earn money) as most like it that way.

Some Truth here I hope I aint too wrong.

The broker. market maker(mm) and electronic communication network(ecn)

mm as the name suggest, manipulate the spreads, fill all your orders by taking your exact opposite trades when no other traders are selling/buying. earns by spread.

ecn gets filled(untaken) orders filled by many mm as mention above and thus alot of tighter even 0 spread on the entry also unfilled orders from mm and some banks. earns by comm.

as opposed to what most would believe. mm do not work together and have different spread n even mid prices. Some are more volatile than others. every different strategy perfer a different broker.
banks and mm are a major player in forex. they see from their backend n look for stops n entry. they throw in massive amount of money or simply adjust the price to hit points with many stop loss and entry level. this is not to make you lose money on purpose, but to make themselves a better position to enter the market to maximise profits.

this is like playing poker against the house that can be allowed to peek into everyone’s cards n deck cards then decide what they want to do with you. Yes, this is investment however you want to call it. its never a game of chance when the broker always win majority of the players. I would never want to downgrade the word gambling. its a game of minority rules in retail broker.

conclusion: forex trading is investment.

Do not question my profitability in forex or gambling or life as I do not wish to boast about it. stay on topic with no flaming. thank you.

103

Spot on.

Losing traders think their “investment” went bad, and blame the market. Losing gamblers have the simplicity of knowing their bet lost. Reasons why don’t matter.

104

How you can say this:

And arrive at this conclusion:

is beyond me.

“its never a game of chance when the broker always win majority of the players.”

Sounds like you might as well be playing the tables in Vegas.

105

Food for thought:
An excerpt from a story and conversation between a trader, an industrialist, a businessman and the owner of “the longest running illegal gambling club in the US”.

The trader was explaining why it is important to him to allow his winners to ride, he was happy to play (gamble) with the market’s own money.
He further explained that having had profit on a recent trade he closed it - simply because there was profit, he realized that this was the wrong signal to close any trade and therefore a mistake, his guests did not understand, Walter Chrysler exclaimed " how the hell can it be a mistake to make two and a half million?";

“I was afraid”, the trader said “of losing that profit, no good reason to close a trade”.

“I’m afraid you’ve lost me” said Ed Kelly, head of United Fruit, "looks like a good trade to me."
T.Coleman Dupont was equally puzzled - profit is profit.

The trader replied, "let me explain, you remember that old joke about the guy who goes to the race track and bets on the daily double and wins.

He does the same on all the other races and wins. Then on the eighth and final race he take all his one hundred thousand dollars winnings and bets it all on one horse.

The horse loses.

“Yeah”, Chrysler nodded.

"Well, he’s walking out from the track and meets a pal who says “how did you do today?”.

“Hmmm… not bad, I lost two dollars”.

As an afterthought, I’m not a gambling man, but I’d wager that there is a trader who comes here from time to time who know who the trader was in the story :slight_smile: