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Losing control of your behaviors will surely make you lose money in Forex. Through money management, the trader knows how much he can earn and how much he can lose. Indeed, he decides on the maximum possible loss and damages and plans the trades according to his decision. It is better to spot a faint similarity in the worst approaches, which only beginners can adopt. If currency trading is done with reason, it becomes a speculative investment activity worthy of appreciation.

% of retail

Many trade for excitement which leads to gambling. The markets are moving 24 hours a day, and unexpected news is exciting. Professional traders treat trading as a job and control their emotions. Traders should focus on making consistent long-term profits rather than looking for excitement. As with any other job, the goal is to follow the rules and be responsible for your actions. Some technologies also allow you to monitor and evaluate market patterns for many days or even weeks before making a transaction.

Is Trading Forex Gambling?

Although most people consider betting at a casino to be gambling, gambling on certain casino games can be approached as a business. This might include playing blackjack with a system for example. Occasional gamblers do not tend to have much of a game plan or strategy when gambling, and for this reason they do not tend to win consistently. The sections that follow cover some of the distinguishing differences between gambling and trading, and offer some techniques to optimize your trading technique accordingly.


Putting in a stop-loss makes sure that a trader won’t lose more than they’re prepared to. A gambler can’t put that in and must exercise enormous discipline to move on when they’ve lost their money. Some financial experts and gambling addiction specialists posture that day trading is more akin to gambling than it is to investing.

Am I Addicted To Day Trading? – 10 Signs You Are Addicted To Day Trading and What To Do To Stop

Forex trading can often be volatile, therefore we advise you to brush up your knowledge of forex to learn the basic rules of currency pairs. We have a team of dedicated market analysts that provide daily updates on the financial markets in our news and analysis section. Thus, trading in Forex has very little to do with gambling or luck.

It is true that a very high percentage of traders end up losing, and if you ask me why this is, I will tell you it is because they trade blindly and with no strategy. Before you trade a penny, you need to make some serious decisions about your trading goals and limits. Once you have make those decisions, you must implement them using yourtrading platform. Use Stop Losses to prevent your emotion and your inner voice from telling you to stay in the trade because ithasto go up eventually.


Instead work out your money management techniques and how you can protect your downside whilst not capping the upside potential. Of course, regardless of these measures, an inherent trading risk will always accompany the forex trading endeavor since the forex market moves, sometimes in rather unpredictable ways. Nevertheless, a trader with a sound trading plan and a business-like approach will generally perform better than one who does not. Gamblers enjoy the thrill of trading and spend little time testing their strategy.

  • So there is some gambling but it is not the same as playing slot machines and hoping your four lines match up or playing poker – but a poker face helps because you can’t let emotion get in the way.
  • You could increase the position size to the point that trading will just become a gamble.
  • Revenue was up for the group in Q2, but the group’s chief financial officer said he was “cautious” after foreign currency “headwinds” meant the business reported a loss.
  • We get to review past price action before putting on a trade.

Or that their new and improved strategy is a sure thing with a 98% win rate? To answer the question, is Forex trading gambling, we have to break it down by the very definition of what it is to gamble. But before we do that, I want to share a brief outline of the way I used to think about trading and gambling.

Here is a list of Forex brokers that offer spread betting trading services to their customers. Spread betting is a form of a currency trading where a specific bet is made per point instead of buying or selling some amount of a currency pair instrument. You make profit if the FX pair moves in the bet’s direction; conversely, you lose if the currency pair is moving away from the bet’s direction. Spread betting is traded on margin — the same way as the spot FX market. Spread bet Forex trading is very popular in the United Kingdom and Ireland as it is exempt from taxation in those countries. At the same time, it is illegal in some other countries .

  • As the game goes on, the market or the spinning table of roulette performs itself and the outcome decides whether you lose money or you win money.
  • Just like gambling, there are no guarantees in Forex, or at least no guarantees that you would be able to quit your day job and spend all your time trading on Forex.
  • In contrast, trading usually does not put traders at such a disadvantage.
  • When a day trader takes a profit, or even gets excited about a potential profit, the brain releases “feel good” neurochemicals such as dopamine and serotonin.
  • Trading forex on margin carries a high level of risk and may not be suitable for all investors.

Having and following a plan is necessary to avoid succumbing when “the going gets tough.” The “plan” allows the trader to break free from the game’s dynamics. This attention to planning is unknown to players of any kind. Specifically, studying before and after starting a trading career is necessary. First, to develop a wealth of knowledge about markets, asset dynamics, charts, and indicators . Then, to understand how the market is changing, learn new strategies and refine your techniques. Many studies analyze graphical martingale data and have observed that the strategy does increase the chances of winning in the short term but fails drastically in the long term.

Most probably, the spread betting brokers will have offices near you. Gambling does not need much planning or analysis ahead of time. Currency trading still requires you to understand global markets and politics to be successful.


But even by doing that, the will still be in a better position. It might be a very tiny advantage, anywhere from 1% to 5%, but it’s enough for the house to eventually come out on top when enough games are played. While it is true that there will be some lucky ones that will win and walk away with millions of dollars, casinos know that if they get a large enough sample size, there will be more losing patrons than winners in the end.

Stock Trading vs Forex Trading – Comparison for February 2023 – Business 2 Community TR

Stock Trading vs Forex Trading – Comparison for February 2023.

Posted: Wed, 09 Nov 2022 08:00:00 GMT [source]

One of the best strategies for this type of trader is to keep the same trade size for a month, despite the growth of your account. Picking a risk to account equity ratio, I would suggest 1-2% maximum, which may be one lot, and just trade one lot the entire month. Then, at the end of the month, if your account has grown by 20%, you increase the trade size by 10% next month.

And obviously – don´t keep increasing your trade size beyond reason. We hope that all this advice will help you become a better trader. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider.


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