Is Trading Forex The Same As Gambling?
It’s a question I get asked a lot…
Is trading forex the same as gambling?
I guess the root of the question comes down to the fact that when we trade forex we do it by spread ‘betting’.
It’s this that seems to set the alarm bells ringing.
But the question got me thinking…
You see, I used to be a gambler.
I loved horse racing. And I whenever I could I’d have a flutter.
I’d even book a whole week off work just to go to the Cheltenham Festival each year.
Each year, together with some like minded friends, I’d rent a flat near the track…
And withdrawing as much cash as I could from the ATM, I’d be off… eager to fritter away my money every day.
Naturally, during the day all the betting was on the horses.
But it didn’t stop there…
At night we’d get in with the Irish punters down the local pub and see it through with too many hands of poker.
Hey, it was fun, but the one thing I most remember about that time was that I never went home with any money in my pocket.
To be honest, at the time, I wasn’t too bothered.
You see, it was more about being there with my mates, having a good time…
I didn’t have a clue what I was betting on; I’d just take a punt on whatever I fancied.
It was pure gambling. And it cost me a lot of money.
You’ll be glad to know those years are over now – I gave up gambling. (And I have much nicer holidays now.)
But hang on…
You might be thinking forex is gambling – I haven’t given up at all.
Well, I don’t agree.
The difference between trading forex and gambling
Sure, for some people, trading forex can be like gambling: you take a punt on a trade and you don’t have a disciplined system.
And when you do that, when you don’t know how to ‘manage’ your trading… it’s just so damn risky, you might as well be gambling.
But if you do trade forex in a disciplined way, it can become a reliable and consistent way to make an extra income.
This is the difference.
Because by learning to trade with a comprehensive risk management approach, you’ll find that you don’t fritter away your savings away anymore…
And you won’t be screaming at your computer screen as though it was a horse galloping in last place to the finish line.
Naturally, sometimes you might back a lame trade, but with a risk managed approach, at least you’ll not wipe out your entire bank.
As a disciplined trader you’ll be using lower staking and you’ll only look for the low risk/high probability trades.
And when you know exactly what you’re looking for, let me tell you…
That puts you a whole world apart from the desperate punter risking it all on a hunch in the 2.40 at Cheltenham.
And so to answer the question:
No, I don’t think forex trading is gambling.