Difference between Forex investing and Gambling
Beginners or aspiring traders always ask how to trade and if forex gambling? But they get satisfied with some short answers like yes, whether it's profitable or not.
If you are also looking for an answer to this question. Then it is important to know more about gambling and investment using a trading strategy. You must try to find the answer to the questions like, what is forex trading? Or what is gambling? If you don't know the actual meaning of both of these things.
Then it will be difficult for you to know the difference between forex and gambling in the traded world. Here we are with the complete information on the forex investment and gambling debate. So let's get started with the basic information of securities. Then we will go up to advance information about this topic.
Forex Trading Is An Investment
We hope that you know what forex trading is. Forex trading is a kind of investment in currencies. But still, people refer to it as a kind of gambling. Why are such statements made about this amazing online trading method? Even some experts fail to answer this question related to currency trading. But there is an answer to this question in this post, wait for it. Just keep in mind that forex trading is an investment.
In which traders enter foreign exchanges with their money. They exchange their money with other currencies through trading systems. After that, they make money and losses when they exchange the currency with others.
Gambling is A Different Thing
In gambling, there are some basic rules. These rules are made without any considerations or technical analysis. Also, these rules vary in various mediums of gambling. Some kinds of games are linked up with gambling to define victory and defeat. One who is defeated will give all his money to the winner and there is a stop loss for you.
In Gambling, two persons have to bet on some predictions to make money. No fundamental analysis can be made in gambling. You will get more information on the difference between forex investment and gambling in this post.
Basic Difference In Forex Investing And Gambling
Know the difference between Fx trading and gambling and you will automatically get an answer to the question, is forex gambling? So what are some major differences between a currency trader and a gambler? Here is a list of differences.
From risk to analytical insights, everything is different in both of them. If you find this post useful then share this post with your friends.
No-Risk Management In Gambling
The most common difference is that there is no past performance in gambling. You can manage the risk and buy or sell functionality in forex trading, but you cannot manage risk in gambling.
No one will tell you that you can win in gambling if you implement some money trading tips. Risk management plans are always used in trading or any other future market methods. When it comes to gambling, there are no such ways to figure out the breakout. In betting, your money is always at risk and there is no way for clearing up the losses.
No Control In Gambling
In investment plans, you can control your sentiment and trading volume and some other aspects. But in gambling, there is no such slippage control. If you are a gambler, you have to put your USD or Euro according to the bet that is going on.
You don't have different options available in gambling like a trading market. You can trade with different strategies and investment advice. But in gambling, you just need money without as per your risk appetite.
Gambling Has Only Two Consequences
There are only two results of gambling as compared to a trading system. Whether you will double your money or you will lose all of your money. But this situation is not applicable in trading.
In forex trading, you can lose money of a fixed percentage with the use of risk management plans. But there are only two consequences in gambling, victory or defeat. The foreign exchange market is way safer than gambling.
Luck Never Works In Investment
If you believe in luck, then foreign exchange trading is not for you. Because without any retail forex strategy and chart patterns, trading is not possible. However, gamblers are working without any strategy and market commentary analysis.
They only believe in their luck. That is why gambling is always seen as a thing related to luck. But luck is never going to help you in trading. Maybe it will work in some trades. But if you want trading as your long term business, then you need to learn forex and forex trading strategies.
Similarities In Gambling And Trading
If there are differences between trading and gambling, then there will be no similarities. No, it is not the truth.
These similarities are also the reason why people ask the difference between forex investment and gambling? These similarities are the reason behind these rumours. Considering these similarities, some experts have said that forex trading is just like gambling.
Quick Rich Method
The very common similarity between gambling and the forex market is that they both offer quick rich methods. Most of the advertisements or forex news that you have seen online will consist of some claims. These claims are like guarantees that say that you can become rich quickly with trading and gambling.
Many gambling websites are promoting themselves as quick rich methods. On the other hand, trading is also promoted as a quick rich scheme by forex brokers. This one is also the most common reason why newcomers are so much excited about gambling and trading platforms.
Start With Low Funds
Both of these methods to become rich can be started with low funds. You can start gambling with less money. You don't need too much money for gambling.
Similarly, you don't have to invest too much in live trading also. These days some forex brokers are also providing trading options with just $50. However, if you want to make a consistent profit through trading, then you need to invest a decent amount of money.
Invest Money Get Money
You put money in gambling and trading, after some actions, you get money or lose money. This process is the same, whether you are a gambler or a trader. Daily you get some money out of your bank account and put it in gambling or trading markets. After that, you make some bets and then the results come out.
Why Are There Myths That Forex Is Gambling?
If forex is not gambling, then why are there so many rumours and myths about it. You may have listened to some people, saying that forex is gambling. Is it a myth or rumour only?
Or is it a reality? Yes, it is not reality and we have proven it above in this post. But the question is why some people have such a mindset. Various reasons are behind these rumors.
The first is religion. In some religions like Islam, trading is believed to be something like earning profit in the form of interest. And in Islam interest is not a good thing. That is why some followers of this religion think that forex is gambling and illegal.
The fail ratio of this sector is too much. Almost 70% of the traders fail and quit the market. Still, it is the largest financial market in the world. But the fail percentage creates this rumour.
Hollywood movies made on trading are also building the mindset of some people. In some movies, it is directly or indirectly indicated that trading is like gambling.
Binary Options Are More Similar To Gambling
Binary options trading is more similar to gambling rather than forex trading. Forex trading is believed to be similar to gambling, just because of the high risk. Otherwise, if you look carefully, binary options trading looks like gambling.
You can see clearly that forex trading is a different thing and gambling is a different thing. Gambling is illegal in more than half of the world. However, forex trading is illegal in some countries only. So some myths raise the question, is forex gambling?
These myths are spread by various things like movies, religious beliefs, etc. But it is only you who can change your mindset.
Let people think whatever they think about forex trading. But you can see it is different from gambling. You can analyze whole things on your own.
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