Top 4 Reasons Why Forex Trading is NOT Gambling

Published October 15, 2020

Forex trading is huge; in fact, it is bigger than the stock trading. But is it considered gambling? Well, it is time to find out.

Forex

Forex or Foreign Exchange market is a global marketplace where currencies are traded. Although there are a lot of success stories in Forex trading, the market is surrounded by a lot of controversies including its legality.

So, is it a form of gambling?

No.

Although there are similarities between gambling and trading, Forex trading is NOT gambling; here are 4 reasons why:

Reason #1: The numbers

The system in forex trading may look and sound you are gambling for pips, but in reality, it is not. The betting in forex is not similar to gambling; while in gambling you rely on luck, in forex trading you rely on statistics and factual numbers.

Reason #2: The traders

In this era of trading in the Forex market, small businesses and individual investors can now trade. Indeed, some banks do not support forex transactions, but there are legit and high-end organizations that support Forex trading. In comparison to gambling, where it faces a lot of challenges on legality, the Forex market is legit.

Reason #3: High gain probabilities

Gaining ten folds compared to your trading capital is too good to be true. There are several success stories of forex trading; however, these success full traders experienced a lot of losses too.

No. There is no 100 percent hit guaranteed in Forex trading, even if you will use strategies. In the forex market, without skillful analysis and patience, all money invested will go to waste.

The high gains are a result of using the right strategy and analysis, as well as, right timing. Also, to achieve high gains, you have to understand the following:

  • Country’s current economy and its monetary value.
  • The interest rates and inflation rates.
  • The impact of politics on the economy.
  • Geographical standing.

All of those are basics in forex trading. Unlike gambling that is dependent on luck, the Forex market is dependent on your knowledge about trading and how the system works, as well as, your skills.

Reason #4: It does not work similarly as casinos

Trading on the Forex market does not work similarly as casinos; for one, it is not gambling. Forex market works in the system. You cannot enter a trade because you want to. There are strategies in forex trading that you need to use to achieve gains.

In forex trading, there are different trading styles – trading by scalping, day trading, swing trading, and position trading – all of these are based on statistics and analysis. And none of these methods are found in gambling, which is why forex isn’t gambling.

Final Thoughts

Forex trading may look complicated and chaotic. However, with knowledge, patience, and skills, all challenges in the forex market can become easy.

So, is Forex trading gambling? No. Not if you do it the right way.

The right way of trading in the forex market includes proper planning, practice, using the right strategy, understanding the whole trading system, and getting assistance from forex brokers.

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