As a beginner in forex trading, there are times when you feel hopeless and ready to quit You are giving all of the efforts and time but the losses are still greater then profits. You start wondering if forex is really a matter of gambling and you are simply not the lucky one. Should you continue trying or losses are the signs to call it a day? Is forex trading for everyone?
Here’s what Webster’s Dictionary has to say about the definition of the word “gamble”:
- To risk losing (an amount of money) in a game or bet
- To play a game in which you can win or lose money or possessions
- To risk losing (something valuable or important) in order to do or achieve something
A gambler, unless he is counting cards or employing some other trickery to try to place the odds in his or her favor, is accepting that the odds are either unknown or slightly in favor of the house. A Forex trader, on the other hand, is almost always trying to use some kind of strategy to put the odds in his or her favor.
Forex trading cannot be conquered in a day. It takes a lot of effort, discipline and time to truly become a guru. As a beginner in forex trading you must be ready for:
1. Trial and error, which at times results in losses. The trick is to consider these losses as a down payment, or educational fee. Forex is not theoretical profession based on text books. You have to get your feet wet at some point to really understand the market.
2. Getting lucky. Yes, it is possible that you have several rounds of wins based on luck, however do not expect it to go on forever. I cannot emphasize enough how important it is to actually understand the real reason of the win. Why did the price move the way it did? Why was the position a winner? One of the critical part of building the right forex trading strategy is to keep a journal of the trades and analyze the market via your notes. What happened in the past will surely repeat itself again in the future and you better be prepared for it. Forex is risky and, while many beginners consider forex market a casino, it is far away from gambling. Unless you come up with a good strategy, back test it for several month and patiently correct the flows, you will lose.
3. Feeling lost and ready to quit. At times, you might feel that you are ready to fluke out. Don’t let the losses discourage you from understanding forex. The more time you spend practicing, reading news, evaluating technical and fundamental analysis, getting involved in forex community via forums and blogs etc. – the better chance you have in succeeding.
When you meet a professional forex trader, you see a person without debts, a person who knows he deserves much more than 9-5 job, an unbearable boss, ugly office desk and absolutely no time for himself and the family. Forex trading is sure attractive in many ways. With enough effort you can change your life for better and say goodbye to your old self.
The first thing you should do is to stop looking for a get-rich-fast scheme. Forex trading is not gamble at all. A good proven system and a set of rules will make you money. If you still consider forex a gambling game and you rather relay on luck, then figuring out how market really ticks, you might be better off playing bingo.
Forex trading is risky; however with the right money management, risk management and discipline you can reduce the risk to the minimum. If forex is done wisely, you can spot tones of profitable opportunities.
Most importantly, don’t let bad days put you down. Get used to the fact that you cannot measure results in a short term in forex. After sequence of losses, you can get a big win and end up having a great profit at the end of the month.
Beginners in forex trading sometimes freak out after couple of bad days. Keep in mind that it is part of the business and there is nothing wrong with it. Stick to the plan, manage your money well, don’t hunt the market for good positions, stay away from revenge trading and over trading, be overall persistent and it surely will pay off. There will always be some losses when trading forex, it’s just a part of the game.
Trading Forex isn’t gambling – Here’s why
Unlike gambling, there is no “house” in Forex trading. Your competitor on the market is another trader who has his/her own interests. What’s more, not all market participants are interested in making money. The list of Forex market participants include: commercial banks, central banks, retail and institution traders, governments, multinational corporations, etc. Multinational corporations do not focus on losing money when exchanging currencies. They trade currencies out of necessity, as they are operating in multiple countries and need various currencies.
In trading, your biggest adversary is yourself: In order to make money trading, you need to plan a trade and trade a plan. You have to think before you make a decision, and don’t let greed get the better of you. Self-management is highly important for trading profitably.
What differentiates Forex and gambling is that traders aren’t passive participants of the process where they’re intentionally put in a worse position by the market. By using various strategies and tools, traders have the ability to turn the odds to their advantage and get ahead of the market, and grow trading balance.
When talking about Forex vs gambling, it’s critical to note that there are many Forex traders that consistently make money. Hedge funds and investment funds are actively participating in the process. You will not see a pension fund that hires professional gamblers to make money gambling. On the contrast, there are many institutional traders working for wealth management companies.
How Can You Avoid Gambling Forex?
If you already have a tendency or addiction to gambling, you should avoid getting into forex in the first place, along with any other form of trading. Forex trading seems easy, but it is not for everyone.
If you have just entered the forex trading, you can stop it at any time you feel. You need to have a firm mindset to enter the forex market. You have to learn how to trade in the forex market to avoid forex trading best. Forex education is a must, whether you are a beginner trader or an experienced trader.