Forex And Gambling

 A Forex trader once asked a question; is Forex Trading and Gambling the same? If they are not then what's the difference?

I perceive this question must have risen from the fact that both entities seem to have high level of uncertainties, and some bit of luck to make successful profits in a certain amount of runs. 

However this is not true. Forex Trading and Gambling might have similar traits, and patterns but they are entirely not the same.

Unfortunately some Forex traders trade the Forex in a gambling manner, and they always end up in losses at the long run. Some are ignorant of this, while others use certain gambling-like trading systems like Martingale. Forex is an extremely volatile and risky business, which can get your account drained in seconds if you are trading the wrong way.

What Is Gambling:
Gambling is playing a game of chance (betting) to win money. It is taking a risk with the hope of achieving a desired result greater than the amount of the risk taken.

Key Attributes of Gambling:
  1. Highly addictive, nervous, and causes restlessness.
  2. Does not require technical approach. Just a game of chance, and luck.
  3. Does not thrive or controlled by any fundamental factor.   
  4. Allows unethical practice, which greatly affects the player's behavior. 
  5. Some amount of brain work is required but not necessary. 
  6. Utilizes more of a random approach in playing the game.
The above attributes clearly shows that Forex Trading and Gambling are not the same. However most Forex Traders are Gamblers. If you are trading the Forex with any of the following characters below then you're gambling.

Forex Gamblers:
  1. If you intend to grow a $50.00 account to $5,000.00 in few weeks or month then you'll unknowingly adopt a gambling approach.
  2. If you are new to Forex, and you start with a Live Account you are gambling.
  3. Trading with an uncontrolled Martingale system. Martingale systems operates by placing random orders with incremental lot sizes in opposite directions. When losses occur the lot size increases to make up the loss. It is a game of chance, and expectation of luck.
  4. Trading with emotions, excitement, anxiety, and for the fun of trading.
  5. If you often place orders but do not know why you placed them, then you are gambling.
  6. Giving your funds or account to an unknown or unverified Trade Manager.
  7. Setting orders in a 50-50 chance manner. e.g Presuming areas where to set pending orders, SL, TP on your chart. In Forex you don't presume.
  8. Trying to get some part of a trend that has reversed or has exhausted its run.
  9. Trading with a poorly written EA, or scam EA.
  10. Holding tight to a losing trade. Refusing to close an order already in a losing position hoping it will reverse.
These are some of the ways traders gamble in Forex. 

Do not gamble with your funds, get trained, invest in quality Forex Resources, and improve your skills and knowledge in all aspects of Forex (technical & fundamental).