Forex Trading Is Not Gambling

 Forex trade is not gambling, forex trade is a serious business. Before I go on, let me define gambling from the oxford dictionary. Gambling is the activity of playing games of chance for money and of betting on horses, etc. There is a general notion that forex trade is gambling or close to gambling and I believe that in the sense that forex is only gambling if one does not have a proven trading strategy and believes he/she can get rich fast by trading without a proven strategy. I see more of forex gamblers than forex traders, and they are the ones with the notion that forex trading is gambling, whereas real forex traders believe that forex trading is a form of investment.

Let me share a story about an old friend of mine, who I read on his facebook timeline where he was complaining about his losses while trading forex, and I asked if we could see and discuss about the losses he made, when we finally met I asked him a couple of simple questions, and these where the questions:

(1)    Do you trade the news based on fundamental analysis?

(2)    How do you spot your oversold and overbought regions?

(3)    What kind of indicators do you trade with?

(4)    What’s your preferred time zone?

(5)    What kind of trader are you?

(6)    What kind of strategy do you employ when trading?

(7)     How do you define your entry and exit point?

(8)    What are your money management rules? etc

To my surprise and amazement, I didn’t get a satisfactory answer after asking him the above questions, most especially when he told me he does not know how to trade the news and the only indicator he uses was the Exponential Moving Average with the wrong period values. Then I finally concluded with him that he was a forex gambler and not a forex trader that was the reason why he kept making losses and if he could make out time I won’t mind schooling him on forex trade for free.

Now to cut the long story short, I would like to prove that forex trade is not gambling, but an international business that involves becoming proficient in a multitude of disciplines, including fundamental analysis, technical analysis, sentiment analysis and self awareness. If you trace back to the past, forex was originally intended to be used by bankers and large institutions like hedge fund investors, etc. But over time, because of the rise of the internet online forex trading firms were able to offer retail traders the opportunity to participate in forex trade with the aim of them trading their own capital by investing in the currency market.