Consider money management on forex versus in horse racing. At one time a trader enters a forex GY short position and risks R=2% of his $10,000 account (|R|=$200) SL=120pips TP=2R, after two hours he exits at 40pips ($66.7) loss, or after one day I exit at 750pips after moving the Take Profit to accommodate new volatility in those first two hours. That is money management where the risk is not static, or the amount to be lost or gained is not set in stone. For horse racing if I open a wager on a certain horse for $200 in a pool of $1,000 or however it goes & the horse wins, I take whatever. If it looses I lose my $200 the whole of it in one stroke with nothing I can do about it since itās a do-or-die game of chance. That should set a wide berth in the practical difference between the two types of risk. All business cannot be classified as gambling by monetary, logical, legal or dictionary definition. Setting up a restaurant business is just that, itās not gambling. If all business is indeed gambling then we have a problem with this new world order! Then that stops this discussion right here, too much philosophy. What do you guys think?
The view of the progression of one trade as a series of bets / gambling instances is rather complex compared to the simple stated fact: a trader opens 1 trade on EurUsd or Djia h4 timeframe & price action does its thing for three days, upon which he exits the trade. Unless its one big gamble I donāt figure to see it as tick by tick bets. I enter and exit the position once & I try to ensure that stoploss=150p doesnāt get hit since Iām trading multiple pairs. The effect on balance is sealed when I close the round-deal (entry-exit) just like in any market. I go off to catch street weather (and so does my broker after placing my entry orders) or enter the forums so I am not actively agonizing over the tick-by-tick risk unlike most gambling. It all boils down to knowing how to spot the best positions, hold the good ones and exit the bad ones. The forex market is so small as to affect any liquidity in the total market, I agree. That more so ensures that deals are not opposing. I should think much foreign-ex by banks, govt and industry is for trade & payouts, very little is speculative? So there is no way one deal is stacked against the other. Try closing one and tell me why the other doesnāt auto-close or fall into disarray?
Being the only real asset by economic definition makes land one of the choicest instruments for speculation. By ārock-bottomā I meant like the bottom of a recession, when the market (real estate) is quite oversold and prices are touching all-time lows. It doesnāt have to be countrywide (which is even better in terms of offering many such opportunities) but in his book he shows it being state-wide, or even along a street facing major dusty roadwork for next one-&-a-half years, and waiting it out. Within three years itās paying good return on capital. That is not a gamble although it is undertaking all sort risk. With skills Kyosaki teaches in his book series and game (who has played it, I havenāt) one should be able to explain a basic strategy to tackle the US real-estate market, given capital and five / seven years. The only difference is I have to work without mortgage asset financing since banks wonāt lend.
Other point would be that gambling is specifically referred to as a āgame of chanceā which I donāt think gets anywhere near practical view of forex. Again, there is a demonstrable prediction aspect in forex. This coupled with the manageable aspect of trading risk is skill worthy enough for an investor like for hedge funds or banks though loans to put money in. I doubt banks lend to gambling, directly or through leveraging positions. They wonāt lend to someone who doesnāt demonstrate an edge practically. Again I pointed out that not all uncertain or risky events are gambling. Also forex can be arranged into a school course, whereas gambling lessons can be hard to figure or teach, otherwise your local prestigious university offers degree courses in gambling finance. Further, the riskiest business venture is options and futures, and that is not gambling but legit business in which even Middle-East governments & firms invest through, like bonds.
It is rather obtuse for someone to call anyone on this forum stupid or slow because one wouldnāt know how fast the other rode his bike as a kid or how one got his first computer or the colour of anyoneās teeth. The guys I know doing the charts are total whiz, they can wire anything voltage without looking and can figure out how to do just about everything from the internet and books by themselves when left to it and they didnāt even have to be top of the class! Some canāt or havenāt gotten there yet but it adds absolutely nothing by insisting on pointing it out. Kindly refrain.
