can forex trading be considered as gambling?
i had witnessed many arguments between people, on the web and outside it, surrounding this question.
some folks claim that trading forex is just like gambling in a
Casino, you take your bet, and if you are lucky enough – you win .
To people who really understand how financial markets work, this is total rubbish.
Of course, you can , if you want, gamble with currencies, just like
you can gamble with anything else in life- like the final score of aÂ
football game , the weather tomorrow, or how late will your train be
this morning.
that does’t mean any of these things have anything to do with gambling directly.
the same goes for trading forex.
when a trader enters a trade, he does not do so because he is feeling
lucky today, but rather because he had analyzed market conditions ,
used his trading system signals , or any other mean that gave him the
opportunity to make an educated decision about where the market is
going! a trader has some tool that can give him an edge over the
market, and if it is a good tool, and he follows it correctly, he’s
profit potential is boundless.
in a casino however , the house has the edge over the gambler. anyone
playing enough time in a casino will statistically lose – we call this ”
the law of big numbers”. throw a coin 10 times, you might get 9 times
heads and only 1 time tails, but throw a coin 1000 times, and i am
pretty sure you will get very close to 500 heads vs 500 times tails.Â
play 1000 rounds on the roulette , and you will loss your money to the
casino!
all i am saying is: if you have an edge – if you learn how to useÂ
information and translate it into a trading decision – than you are a
trader, and the risk you take in your trades is purely a business risk –
not a gambler’s bet !
GreenBull,
1 comment:
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