Throughout my trading career, I’ve seen many people negatively react to Forex. Upon hearing that I’m a Forex trader, most people make a grimace or put a sneer on their face. The problem is that they don’t take Forex trading seriously. People think that this is a fling or, what’s worse, an addiction that needs professional treatment.
Before reading the article and writing your questions in the comments section, I recommend to watch this video. It’s not long but covers the biggest part of questions on the topic.
Others think that trading is for rich people with money to burn! I know why Forex has such a nasty reputation. It has to do with dishonest brokers and dealing centers that attract naive clients with empty promises. The only goal of such establishments is to reap off their clients and take their hard-earned money. As a result, thousands of disappointed traders, who have lost their savings, keep telling others that Forex is a fake.
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’s hard work. For them, Forex is not a game but a serious business that requires discipline and expertise. Becoming a consummate trader takes years of non-stop learning and training.
Along with common features, Forex and gambling have some differences. First, in trading, you can’t lose more than you have in your account. If you don’t limit your losses, you’ll get a margin call.
Second, the price movement is not at all random. It’s based on economic laws, the main one being the law of supply and demand. In trading, it all depends on your ability to analyze the market and predict price behavior. When it comes to gambling, a casino always has an edge over a gambler. Casinos do everything possible to encourage their clients to spend (synonymous with “lose”) more money. For example, you won’t find windows and clocks in any casino. It’s done to make gamblers lose track of time. Furthermore, casino clients are offered free drinks and bonuses.
In the Forex market, no one cares about what you do and how much you invest. Forex is the place where major corporations, central banks and other big players are making multi-million trades. A common trader is just a tiny part of that community.
Wrapping it up, let’s outline the essential difference between gambling and trading. In a casino, you can’t control the outcome of a game. When playing roulette or slots, you can only pray and rely on luck. In the forex market, your success depends on your skillset. I hope that I’ve managed to debunk a popular myth that Forex is as dangerous and poisonous as gambling.