Anyone aware of the trading concept has at least once wondered if this activity is essentially just gambling. Many traders are constantly asked if they like Las Vegas and betting money in casinos, as Forex is perceived that way by most people.
Of course, a successful Forex trader would never claim that their winnings are merely a matter of chance. The main question remains, is Forex yet a slightly more complex form of betting, or is it a completely different concept?
Obvious Similarities to Betting
At first glance, Forex does not seem much different from what gambling is. Essentially, it corresponds to all the criteria of betting, as fact trading means risking something one owns against the prospect of turning a profit. No matter how skilled and knowledgeable one is, one can never fully neutralize the risk of this activity. More than that, many retired traders claim that Forex is not just gambling – it is worse than that, as one does not acknowledge the fact that what he does is a pure game of chance.
Surely, traders whose purpose is attracting new partners promise great profits and claim that gambling does not have anything to do with Forex. But the interests of such people are quite obvious, and they might get a bit defensive when being told that the effectiveness of trading does not depend on the skills of a person. When playing poker, one is fully aware of the rules and knows the deck of cards one is holding in one’s hand, and the group of people one plays against is certain. When playing on Forex, one plays against the global community of businessmen and experts, and the stakes are much, much higher.
How is Forex Different?
However, Forex is not completely the same thing as gambling, and here is why. For instance, winning playing roulette only involves knowing the rules of spinning the wheel and depends on one’s luck. Trading on Forex implies an understanding of how economics and politics work in general as well as being fully aware of the processes taking place in the world at the time.
Preparing for trading is a very time-consuming process, as no matter how much one knows, one can never know exactly how Forex works or eliminate the risk of this activity. Another aspect important to understand is that if one wants to gain profit while trading, one needs to have a significant capital to invest, that is, thousands or even millions of dollars. On the contrary, playing in a casino does not require huge investments.
Our Verdict: Forex is Gambling
All in all, Forex does correspond to all the criteria that make gambling what it is. Although stakes and database needed to make an investment are different from those in a casino, Forex does not provide traders with any guarantees, and everyone understands that giving up one’s full-time job to spend all of one’s time investing money in companies in hope to achieve benefits would be a tremendously insensible idea.
However, the fact that Forex means gambling should not restrain one from trying to explore it. It still provides one with a chance to win some money, and although very few people are meant to succeed in it, there are still some who are capable of doing so.