Gambling is defined as staking something on a contingency. However, when trading is considered, gambling takes on a much more complex dynamic than the definition presents. Many traders are gambling without even knowing it — trading in a way, or for a reason that is completely dichotomous with success in the markets. There are many variables in the market, and misinformation among investors or traders creates a gambling scenario. Until knowledge has been developed that allows people to overcome the odds of losing, gambling is taking place with each transaction that occurs.
There is a popular opinion that trading in the forex market is like gambling without leaving your home. There is no denying that both forex and casino have a few things in common. First, both industries have to do with money. Second, forex trading can be as high-risk as gambling if you trade without stop losses or reliable strategy. And finally, you can lose all your money in the forex market as easily as in a casino.
Is forex market a casino? This is a common opinion among outsiders, who have a very remote idea of trading. For professional traders, it is hard work. For them, forex is not a game but a serious business that requires discipline and expertise. What differentiates trading from gambling is being able to bend the odds in your favor. Gambling expects more return on investment compared to the effort put into action. As a trader, you must realize that anything can happen in the markets. The profit you make is not luck, it is a skilled assessment of the fluctuation of values.
An inexperienced trader that starts trading without the necessary bankroll and knowledge can also go to the next casino and play Roulette or any other game. That means he’s gambling while trading. But hey, that’s ok. Not everybody wants to make living trading forex. There are people that think it is exciting and they are looking for a rush. And with this point of view, forex trading offers even better winning chances than most casino games. Especially at times with high volatility, it is possible to make $ 5000 out of $ 50 with pretty good odds.
While the activity forex and financial trading have some overlaps with the definition of gambling, there are also important differences. However, it would be fair to say that for both those using excessive amounts of leverage and those who are newbies lacking experience, it might be the case that forex is simply just another form of gambling. The fact that there is a significant minority of successful traders who are able to turn a profit over the long run demonstrates the fact forex is more than just simple gambling.
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