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Is Forex really gambling

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  • First Post: May 21, 2006 5:47am May 21, 2006 5:47am
People have been telling me for a long time that what I do is no different from playing poker. This absolutely makes no sense to me.

Is fx trading really gambling ?
Assuming that '...what I do....' means trade FX, there is a difference:

If you are trading, FX or any other product, you have a knowledge of what happened in the past (what happened at previous price levels). This can provide you with an edge (more chance of one thing happening than another) usually when combined with other factors within your system.

If you gamble with most casino type games, the house has an edge over a reasonable sample (due to the rules), so very few players have a chance of beating the house consistantly. With, for example, Blackjack, if you understand and can carry out a basic card counting system, you can take the edge away from the house, though risk being thrown out of the establishment !

It is common sense that you would not risk real money at trading, unless you can paper trade a system, over a reasonable sample, and consistantly be in profit. It is likely that your system might suffer when you introduce real money, as that brings in mental elements (pressure to rule break) that do not exist when paper trading.

Unless you are doing either for pure entertainment value, why would you bother trading or gambling unless you know you have an edge ?
Also check out this thread:
http://www.forexfactory.com/forexfor...light=gambling
You might find this thread helpful:
Trading vs Gambling
any form of investment is gambling, you are betting $x and hope to get back $x+1

starting a business, buying a house, buying microsoft stock, heck even having a baby is putting in something of value in hopes of creating something of more value.

There is a common idea lately that buying stocks and bonds is investing and working with futures and forex isn't, but what they fail to realize is the whole stockmarket has been in a bull trend for about 25 years now and is starting to break. Go look at the DOW chart from about 1967 to 1980, notice it doesnt move? We have all been taught to throw money at the stockmarket (well children of the 80's that is) and thats a legitimate way to invest.

Life itself is a gamble, learning to pick the right odds is the way to go

I will hafta say tho, 400:1 leverage is much like a slot machine
Quoting Isotonic
Also check out this thread:
http://www.forexfactory.com/forexfor...light=gambling
Dude you're quick!
I guess the reason these people (those saying trading is gambling) are saying such is because they have absolutely no idea of the logic behind trading a system. Since they have no idea of the profit expectancy of a trade, to them there's no way to tell whether a trade is likely to earn or not, in other words unpredictable, and therefore no different from gambling.

I agree with the previous posters that if you don't know what you're doing then you are just gambling. If you read about successful traders, one common thing that comes out is that they found their edge (I define an edge as having a system with a good positive profit expectancy, such that even if they're sure that they won't earn in every trade they're almost as sure that in the long run their profits will exceed their losses) and learned proper money management. Hence they were able to last long enough, allowing them to learn enough about the market to become consistently profitable.

I have a friend who despite having already learned to have consistent profits in stock trading, can't instill the notion of trading as a business to his parents and relatives. The thing that annoys him is that these people consider what he's doing as gambling, and hence they think of it as something that he should just stop.
Thanks for the replies, I knew I wasnt gambling but still the constant influence/advice from other ppl, made me think twice whether I was doing the right thing.
Thanks for the replies, I knew I wasnt gambling but still the constant influence/advice from other ppl, made me think twice whether I was doing the right thing.

Quoting hagadol
I have a friend who despite having already learned to have consistent profits in stock trading, can't instill the notion of trading as a business to his parents and relatives. The thing that annoys him is that these people consider what he's doing as gambling, and hence they think of it as something that he should just stop.
This annoys me too,especially after 3 years of constantly beating the S&P sometimes over 50%
Quoting varunk666
Thanks for the replies, I knew I wasnt gambling but still the constant influence/advice from other ppl, made me think twice whether I was doing the right thing.
Well, if u would open a trade on Friday, just minutes before the market closes
and you'd put a 20 pips stop loose and target point, let's say, on usd/jpy -
i would call that gamblin of course.

T.
Quoting witchazel
heck even having a baby is putting in something of value in hopes of creating something of more value.

What do you put in of value?

jbrand, that was naughty
JOHN 3:16
Quoting varunk666
People have been telling me for a long time that what I do is no different from playing poker. This absolutely makes no sense to me.

Is fx trading really gambling ?
Playing poker has NOTHING to do with gambling. However, as a relatively frequent poker player, I reckon that poker and trading have many elements in common: the mind-set and emotions are more important than the technique itself.
Yes, this is true. The seperation from gambling is that in Trading effectively as in playing poker, not against a Casino, There can be a positive expectancy . In other words the opponents do not have a house edge that cannot be overcome..

Scott

Quoting WTB
Playing poker has NOTHING to do with gambling. However, as a relatively frequent poker player, I reckon that poker and trading have many elements in common: the mind-set and emotions are more important than the technique itself.
i think after some experience in trading that : ok it might not be pure gamble i mean there are systems out there that help u develop a pattern that help u win (not always but most of the times if treated rightly) however i still beleive that there is a lot of luck involved (come on u all know it just dont like to admit it as such...huh???) more than any other investment(i.e stocks bonds etc) and simple reason is because forex is such an open market and everything and anything goes....from fundamentals, technicals, political, geopolitical, crisis in a country, anything that happens in the world affects forex more than any other market....when u deal with currencies of any country then u deal with everything that affects that currency....

so many times i spend trying to explain why oh why that move happened?? what caused it?? its not right technically...its not right fundamentaly....just doesnt make sense.... so at that point if u r in a position and it goes the opposite way for no reason u just lost...for no reason....

so basically i learn to deal with the fact that market moves (rightly or wrongly) every day and i try to survive and make profits (with system or not a system, news, charts,etc)BUT if i have a bit of luck aswell then i am a winner one way or the other....

one thing is for sure...if i like gamble then forex is for me...if not...then i choose another investment that is more secure....and the more greey u r....the more chances u have to loose everything u made plus capital...just like gambling...
Quoting tojoko
Well, if u would open a trade on Friday, just minutes before the market closes
and you'd put a 20 pips stop loose and target point, let's say, on usd/jpy -
i would call that gamblin of course.

T.
If there is a pattern between the close of friday & the open of sunday which favours that you will win rather than win, then it's not gambling, it's pure trading...


Thanks,

Nader
One thing is for sure, and every experienced trader agrees on this: the markets do have a slight component of randomness that just cannot be factored into the equation. It's like the zero square in a rulette. That's why no trader has a 100% win/loss track record. And that's why money managment and possitive trading expentancy is so important, so you dont blow it all in one "random" or "caotic" move.
Quoting WTB
One thing is for sure, and every experienced trader agrees on this: the markets do have a slight component of randomness that just cannot be factored into the equation. It's like the zero square in a rulette. That's why no trader has a 100% win/loss track record. And that's why money managment and possitive trading expentancy is so important, so you dont blow it all in one "random" or "caotic" move.

i couldnt agree more!!!!
Inserted Video
How do ppl even get an idea to post such a crappy and idiotic videos, is it for laugh or for real ? I guess they never heard of term zero sum game..or I just being trolled...my bad, sorry..
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