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Forex gambling? 83 replies

Is Forex really gambling 25 replies

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Are We All Gambling?

Put simply, a game of chance. Don't really see fores like that. You can definitely forsee the outcome most of the time and you can effect your trades to reasonable degree.
  • Post #202
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  • Edited at 4:11pm Mar 9, 2019 3:43pm | Edited at 4:11pm
Quoting minaung
{quote} No, but your friend open a business and you bet his successs, that is gambling. You are just betting your friend business.

Of course I can bet on his business like everyone, what I meant is that him opening a restaurant is not a bet because a restaurant has a positive expectancy, you buy 1 usd you sell before taxes 4 usd to customers, unless you chose to open that restaurant because you made a dart contest instead of your skill.

Now luck, experience, money, idea, etc..., is definitely involved in any business, it still doesn’t make it gambling because you are not counting SOLELY on luck to win money.
LDFX Trading Ltd
Yes of course, no one knows the market for sure
Hmm.... Can someone enlightment me on this. The moment we click buy or sell on a trade. That next few seconds would be up or down? Is the probability 50%
At that few moments.
However, our risk and probability is chance on 5 min and someone is 1 day. Everyone is different.

I didn't vote because there isn't right or wrong. There is no answer. One profitable trader can say he is gambling. Another can say he is not winning by gambling. Same outcome on a professional poker player. They all say they play by odds or probability.
Quoting Pro.yingYang
Hmm.... Can someone enlightment me on this. The moment we click buy or sell on a trade. That next few seconds would be up or down? Is the probability 50% At that few moments. However, our risk and probability is chance on 5 min and someone is 1 day. Everyone is different. I didn't vote because there isn't right or wrong. There is no answer. One profitable trader can say he is gambling. Another can say he is not winning by gambling. Same outcome on a professional poker player. They all say they play by odds or probability.
after you click sell or buy the real probability is not at all 50/50 ,and this because WE DONT KNOW. whats the real probability? WE WILL NEVER KNOW. we all had entries where profit came up almost immediate,we all had entries where loss came immediate,so is not 50/50. but probabilities are way different in each entry we make.
and i will not say this is 100% gambling cos there are many other aspects involved in trading if we compare with roulette for example. You cant manage your risk at roulette same way like in trading, you dont have same MM options in casino play like in forex. you dont have fundamentals and technical who affect roulette like we have in forex. so is not really gambling for me is more about knowledge and experience of MM.
If we will take everything that involve a risk is a gambling then ... is a big risk even when you step out of the door.
cheer up!
Take what you can, give nothing back
If people use statistics in their trading they will get answer to may questions...
Try don't lose pants never...
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Quoting hilmy83
Definition of gamble (Entry 1 of 2) intransitive verb 1a: to play a game for money or property b: to bet on an uncertain outcome 2: to stake something on a contingency (see CONTINGENCY sense 1) : take a chance transitive verb 1: to risk by gambling : WAGER...
Forex trading is not gambling if you know what you're doing.
when you can accurately predict the future, you leave nothing to chance.
Quoting zizoo
{quote} Forex trading is not gambling if you know what you're doing.
Not at all. You dont know you are doing. People controls the market knows they are doing and...you are doing too. And if you don't do they want they will flood you with enough fake information for make you believe the sky is clear and you right in your next trade. And that is reason you never know you are doing even you think it
Try don't lose pants never...
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Quoting zizoo
{quote} Forex trading is not gambling if you know what you're doing.
when i play casino i definitely know what i am doing,i go there to have some fun and pay for it. any fool can win in casino,but the options are limited.
what makes trading not like gambling is more about the options you have to manage your previous actions and how you use those options to improve final results.
and dude... really is not the case to use such dirty language against any other trader (see your profile), better change that and try use some decent language even against something you dont agree with. such language never prove any intelligence.
cheer up!
Take what you can, give nothing back
If you're doing anything that involves probability and have money on the line then you're gambling. Not all trading involves probability however.
Quoting EcoTrader
If you're doing anything that involves probability and have money on the line then you're gambling. Not all trading involves probability however.
Since you dont know how good is your next trade then all trading ways enters inside probabilities "games". Really i dont understand why financial markets uses AI if is not a probabilities market...
Try don't lose pants never...
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Quoting braintheboss
{quote} Since you dont know how good is your next trade then all trading ways enters inside probabilities "games". Really i dont understand why financial markets uses AI if is not a probabilities market...
Firstly it isn't AI its algos. AI is a complex program that can solve issues without interference. Algos are just a series of complex if then else logic. Nobody has AI, it is used too loosely.

All technical trading involves probability but not all trading is technical. I for example don't trade probability, I trade sentiment pricing in new information which isn't the same as trading without knowing what might happen, because it is happening. An example from last week is ECB policy change. There was absolutely nothing about that even that included probability if you traded the information instead of a technical setup.
Quoting EcoTrader
{quote} Firstly it isn't AI its algos. AI is a complex program that can solve issues without interference. Algos are just a series of complex if then else logic. Nobody has AI, it is used too loosely. All technical trading involves probability but not all trading is technical. I for example don't trade probability, I trade sentiment pricing in new information which isn't the same as trading without knowing what might happen, because it is happening. An example from last week is ECB policy change. There was absolutely nothing about that even...
All that boring days like Mondays where movements are like an electrogram are Algos. And normally with AI. For any reason that people spend millions in their trading machines. And even some black swan are made for them. Really news and fundamentals are not the common behaviour, only the exception and everytime looks more like a casino Roulette. Dont you remember Oct/Nov 2018? The heaven AUD/NZD months? All a big bet. The bet was see how long go up until the fall...

And you dont forget Soros and his big fail in Brexit vote. He bet will leave YES and his bet was a big fail...
Try don't lose pants never...
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I contacted Dr. Clark, the author of the article titled "Dumb Questions for Smart People: Why Our Brains Like Gambling" as I posted it in post #195. https://www.forexfactory.com/showthr...8#post12019988

I asked him about "Positive Expectancy" as LDFX uses that concept for the basis of his declaration that Forex trading is not gambling. With his permission, here is what Dr. Clark wrote back. Please read the articles and watch whatever you can see of the movie (bits and pieces on You Tube) and draw your own conclusions. I should add that in a subsequent chat Dr. Clark said that the movie is actually not very good and not exactly related to the topic:

____________________________________________________________________________________
Hello Mr. Clark

I read your article about our brains liking gambling on Wealthsimple site. Incidentally, a week before your article was published, a topic appeared on Forex Factory forum which is mostly about trading the Forex currency market asking a question along the same lines. A number of people believe trading Forex is akin to gambling and others don't. Would you please take a look at the discussion thread here: https://www.forexfactory.com/showthread.php?t=876969

Among all the participants, there is one particular forum member with the handle LDFX. This person believes that trading currencies is not gambling. He claims that any endeavor that has a "Positive Expectancy" can not be gambling. Furthermore, he states that anyone losing money trading currencies is doing so because he/she is disregarding this fact (positive expectancy) and therefore trades the market as a gambler. LDFX claims that he approaches currency trading as a businessman and that enables him to be successful and therefore he is not a gambler.

My question is; how does LDFX's particular view fits into your research? Is it a fallacy that a gambling mentality does not apply if you consider positive expectancy or is LDFX just fooling himself? Apparently no amount of reasoning is convincing him that trading the currency market (which at times is very unpredictable and volatile) is in any shape or form gambling. It would be really nice to have your opinion on the matter because myself and other forum participants are only laymen on this subject matter and can not contribute in a scientific manner.

I appreciate your attention to this matter.

Regards




Hi
Thanks for your email following up on the WealthSimple piece. I should start by saying that I don’t work on financial investment behavior, and I don’t know the first thing about forex trading. I’m attaching two papers that you might find interesting.

The Reber paper makes the important point that gambling is just one example of many risky activities that can be placed in a 2 x 2 matrix of ‘expectancy’ vs ‘flexibility’. Legal definitions of gambling do not require negative expectancy. Most but not all forms of gambling are negative expectancy and low flexibility (e.g. a slot machine) but Reber is interested in poker as a game with some flexibility, where experience/expertise may allow the poker player to move from negative expectancy (in novices) to possible positive expectancy (in elite pros). There is some evidence that the very top poker players in the world are fairly stable from year to year, and they do make a profit. Of course poker players and traders also suffer from cognitive distortions, including the ‘bias blind spot’ where they are poor at recognizing these errors in themselves.

The other paper (Arthur et al) separates gambling from ‘traditional investment’ from ‘speculation’. The latter includes day trading and other activities that are characterized by short-term, high-risk investments. I imagine (most?) forex trading falls into this category. The question of whether forex has a positive or negative expectancy seems to be an open question – I don’t see any obvious reason why currency trading would have an inherent positive expectancy (or surely everyone would be doing it!). Arthur et al review the literature to say that most day traders lose money in the long run, from a combination of psychological factors (to which LDFX could in principle be immune, similar to Tetlock’s book ‘superforecasting’) and other ‘mathematical’ factors such as day-to-day independence and fact that insider-knowledge is required to beat the market. Combining the two papers, LDFX could argue that his/her personal expectancy is positive based on his/her experience and skill. But even then, trading is very competitive, and what often happens is that traders lose their edge at some point, and profit can quickly turn to loss, given the high stakes and volatility. The film ‘Two for the Money’ is a good portrayal in sports betting:https://cgr.psych.ubc.ca/2015/06/10/...for-the-money/

Interested to hear your thoughts on this, and thanks for your interest in our work,
Luke


_______________

Dr Luke Clark
Director, Centre for Gambling Research at UBC
Department of Psychology, University of British Columbia
2136 West Mall
Vancouver, B.C., V6T 1Z4,
Canada
Tel 001 604 827 0618
Website cgr.psych.ubc.ca, Twitter @LukeClark01 @CGR_UBC
Email [email protected]
Quoting braintheboss
{quote} All that boring days like Mondays where movements are like an electrogram are Algos. And normally with AI. For any reason that people spend millions in their trading machines. And even some black swan are made for them. Really news and fundamentals are not the common behaviour, only the exception and everytime looks more like a casino Roulette. Dont you remember Oct/Nov 2018? The heaven AUD/NZD months? All a big fake And you dont forget Soros and his big fail in Brexit vote. He bet will leave YES and his bet was a big fail......

You don't seem to understand trading fundamentals. There was nothing fake about October and November in terms of AUD and NZD. It is all explainable. I am not sure why you are mentioning Soros,that's not exactly a trade signal is it. Monday is boring because there is generally no news on Mondays.
Quoting EcoTrader
{quote} You don't seem to understand trading fundamentals. There was nothing fake about October and November in terms of AUD and NZD. It is all explainable. I am not sure why you are mentioning Soros,that's not exactly a trade signal is it. Monday is boring because there is generally no news on Mondays.
I understand how works financial markets enough for dont fall in cliches. Fundamentals are a weak reference at this moment. You only have see what is happening last times in countries like UK. Maybe you are confused how works forex in overall.

About Soros is a bet trader ( at least he try get benefit of unexpected events ). Its a surprise you dont know his influence. You can ask in London. They have a good memory of him...
Try don't lose pants never...
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Quoting EcoTrader
{quote} You don't seem to understand trading fundamentals. There was nothing fake about October and November in terms of AUD and NZD. It is all explainable. I am not sure why you are mentioning Soros,that's not exactly a trade signal is it. Monday is boring because there is generally no news on Mondays.
monday's are usual boring/range but definitely not because of the absence of the news,we had really hot monday's and there was no news but was ...something else, i found more reliable reason might be the just the normal week start and mostly boring early monday when not all players are at ''table'' due to time difference, cos some are still enjoy their sunday time in my early monday. but will be a mistake to start now one polemic about this.really useless subject. as the subject is gambling or not i stick to my personal view and that is trading is not gambling,but thats me.
Take what you can, give nothing back
Quoting braintheboss
{quote} I understand how works financial markets enough for dont fall in cliches. Fundamentals are a weak reference at this moment. You only have see what is happening last times in countries like UK. Maybe you are confused how works forex in overall. About Soros is a bet trader ( at least he try get benefit of unexpected events ). Its a surprise you dont know his influence. You can ask in London. They have a good memory of him...
Weak reference. Fundamentals are the source of all fx trends and volatility. Soros who made a ton of money shorting the pound did so because the fundamentals showed the situation would inevitably fall apart. He wasn't trading a chart.
Quoting Husky77
{quote} monday's are usual boring/range but definitely not because of the absence of the news,we had really hot monday's and there was no news but was ...something else, i found more reliable reason might be the just the normal week start and mostly boring early monday when not all players are at ''table'' due to time difference, cos some are still enjoy their sunday time in my early monday. but will be a mistake to start now one polemic about this.really useless subject. as the subject is gambling or not i stick to my personal view and that is...
I trade economic releases every weak and Monday is generally dead on the calendar. Sometimes news breaks over the weekend or a story that was developing the week before has developments over the weekend. In those instances yes monday can kick off with a bang but for the most part it is quiet.
Quoting EcoTrader
{quote} Weak reference. Fundamentals are the source of all fx trends and volatility. Soros who made a ton of money shorting the pound did so because the fundamentals showed the situation would inevitably fall apart. He wasn't trading a chart.
He trade information. Confidential information as all big sharks. Anyway if fundamentals are the base why AUD passed from new safe currency to weak in one month? All is relative. Sometimes fundamentals helps but normally is a chess play for manipulate market. Last months gbp movements are a good example. For any reason people call Brexit drama or the new world circus...
Try don't lose pants never...
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