Forex Trading Games, Betting or Speculation?

Forex Trading Games, Betting or Speculation?

Very often when people talk about pushing a currency trade, Im challenged by people saying currency trading is nothing but playing. It used to be a time when I would bend at the hook and launch in a defense for currency trading. Now experience has shown me that sometimes it was the words that I used to understand the different of people. When I approved this, it was easier to define a suitable response.

Then we can look at the three words, games, betting and speculation.

Gambling

This single word is probably the biggest cause of confusion in this debate. As an analogy, consider the word that is running and lets limit this to the word as a physical exercise.

Whoever goes for a jog for 30 minutes in the evening after getting home from work is driving. The athlete who runs 100 meters in 10 seconds drives, the person who runs for 5 hours to complete a marathon runs.

At the highest level, gambling can be considered as an engagement of any activity that involves a risk and is associated with prospects of potential profit. If this definition is used, yes, Forex trading is gambling. But then investing in equities and shares, even leaving money in a bank can be seen as a game it rarely happens but the banks fail.

In this article, gambling is defined as strike or risk of money on the outcome of something that involves random events. For example, a dying roulette wheel throws a lottery ticket. In this decision, there are no previous events that have any significance for the result.

Forex trading is nothing like this.

Betting

The definition here will be at stake or risk at each event that expects a result where the result is not completely random but is influenced by other variables. The latter part of the sentence is important because it adds an additional element to the definition of gambling.

As an example, anyone can decide to bet on a team that wins based on the fact that two of their key players have returned from injury. Or maybe the worlds number one in tennis is playing world number 134.

There are a number of traders located in this position. For example, a currency trader expects currencies to grow stronger based on improved financial data. A stockbroker expects a stock to increase in value based on corporate performance.

I would even go as far as saying that many who invest their money in shares and shares, in pension funds, etc., are actually investing in making the right choice. In sports events, success or failure says the results are known within a few hours, when investing in stocks and sharing the timeline is considerably longer.

I think that the majority of traders adopting this approach can get their trading strategy defined as betting.

Speculation

I would like to propose a definition that speculation is a measure that poses some risk of making an economic gain, supported by considering a number of factors that the trader considers to support the decision taken.

In other words, when you wonder, you base your decisions to evaluate a variety of sources of information, based on your knowledge and analysis of past events. It is this active involvement in the decisionmaking process based on actual facts whether they are events, messages or technical analysis of chart patterns that define speculation from betting or gaming.

All successful professional currency traders and those who run a housing swap trade are doing this way. These skills can all be acquired and must then be put into operation.


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