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Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

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You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

2020-10-08 • Updated

Game of Odds: Gambling vs. Trading

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When it comes to trading, some controversial opinions always appear. You start trading, and one of your friends, instead of support, throws a tantrum, telling things like, “What? Investing? No-no-no, it’s nothing more than foul games”. After such an unwelcome reaction, you, as a novice trader, get lost in the lake of doubt. Is Forex trading just gambling? What am I doing? At first, you feel drained, but then you become calmer, conduct research that allows you to give your friend quality arguments, and continue to overcome difficulties you face on the trader path.

Here are five halts before we reveal the truth. 

Stop one – the dictionary-worm edition 

To give you a hand, we’ve launched the truth-seeking process. And our first stop in this long journey occurs to be a dictionary. Maybe a quick look inside will clear things up. Oxford dictionary gives us the following gambling definition: “the activity of playing games of chance for money and of betting on horses, etc.” The key concept here is that: you put your money at risk, and the winning is based only on a pure accident.

According to the same dictionary, trading is “the activity of buying and selling things.” There are no words about revenue and chances. However, to be more objective, keep in mind that Forex trading is supposed to have risks, and money issues are also included. To sum up, both trading and gambling have a strong association with the expectation of profit and risks.

Hmm, it turned out to be not enough to sound more convincing. We are moving on to the next stop.

Stop two – risk distribution 

What seems to be the most apparent difference between gambling and trading on Forex? The answer lies beneath the surface – it’s the opportunity to prolong the trading risks, whereas, in gambling, your money may catch the fade away at once.

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Gamblers throw their capitals into one particular channel. If they fail, it is impossible to get the money back – they lose everything, while traders can prevent total loss even if they have put money on one deal. Trading online more like investing – you own something, but then you can sell something or close the order and strengthen the capital when in need.

What is more, online trading shows you the perspective. In gambling - your chance to profit stops when the game itself is over, when trading gives you access to grow via probable future income streams.

It’s getting more transparent, isn’t it?

Stop three – test-drive

In this term, trading Forex like playing video games – at first sight, it’s too complicated, and without thorough preparations, you won’t be able to cope with an enormous amount of rules and limits.

To master the list of trading’ instructions’, the demo accounts were developed. These accounts allow you to practice real market decisions on Forex but avoiding risks. When you think you are strong enough to open the real account, you won’t be surprised – everything will look the same way as in the demo mode. Nothing will confuse you. Thus, you can start trading right away.

In turn, gambling has no identic-to-the-real-game simulator. Of course, you can find some children’s games, but it has little in common with the actual stuff.

Stop four – who owns information

The power of trading lies in the availability of the relevant information, and gambling has none. The fundamental and technical analysis goes hand in hand on the Forex market with the market data and breaking news. It is priceless for a long ride. Based on the market info, people can develop their strategies and show quick reactions to the market updates provoked by unpredictable events.

Gambling vs. Trading_003.jpg

Traders become more persistent and flexible in their activity, whereas gamblers have access to the facts and cases reflect only the ‘coldness’ or ‘hotness’ of the game table. Still, it is useless if you want to measure the probability of success. Unlike trading, there is no information about the previous experience, winning tactics, and risk management in gambling.

And we are slowly crawling to the most representative dissimilarity of the two activities holding our attention for the last several minutes.

Stop five – knowledge is on guard

If you are keen on short-term gain, gambling is your choice. If so, prepare yourself for an inevitable crash. It is sad but crucial to realize that risks there are too harsh in the pretext of reward. No tactics, no successful gamblers’ background experience, no training is going to help you. Everything depends on chances, not your thought-out moves.

On the other hand, trading is an activity about which you can accumulate knowledge and make it work in your favor. Aside from the market data, traders can obtain a magnitude of beneficial investing info and use it to become a Forex guru.

In other words, you can master trading skills, whereas your gambling skills concentrate only on luckiness, intuition, and maybe cheating. Both traders and gamblers are walking in the darkroom, and they have no idea where they find themselves in danger. Nevertheless, to some extent, info in trading is a super bright flashlight that shows the way. Much better, right? In gambling, you stay alone in the darkroom, and light is not going to be there for you.

Efforts you put to shine on Forex are definitely worth – you practice a lot and see the results.

The final stop

By this time, your friend’s distrust must be ruined! If it doesn’t, only the trading experience can fetch his or her over. Suggest them to open an account with FBS and try trading with the best conditions. We bet they will make up their minds.

In conclusion, we would like to admit that despite all the differences, risks are unavoidable in trading and gambling, and nobody has the power to eliminate them. But we can change our attitude to it. Therefore, it’s up to you to decide whether you are a blind kitty to bet or the lion king to trade.

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