Why Forex is not as Gambling
There are still many people who equate Forex trading with gambling, which is simply unfair. There are indeed some similarities between Forex brokers and various best online casinos, but they are in no way exactly the same. To show you how much they are not, let’s look at where they diverge:
Profits and losses are not absolute in Forex
When you place a bet with a betting company, you either lose your entire investment or earn the returns according to the odds. Here, the profits and losses are known ahead of time, and they are fixed – you can’t adjust your bet once the game is on.
With Forex trading, however, you can still adjust the value of your gains, losses throughout the trade and your strategy. After you have placed your order, you can see how you’re performing and are free to exit the position at any time. The returns or losses in this case are not fixed but are in control.
Most critical factors can be anticipated in Forex
While gambling, you have to worry about the players involved, and there can be unexpected surprises. For example, when betting on a football match, the top scorer can suddenly suffer from an injury, taking them out of the upcoming game. When such a thing happens, it completely changed the game, but such incidents are completely unexpected.
On the Forex market, though, factors that affect the markets are usually known ahead of time. Forex traders know when the next FOMC meeting will be and when the presidential elections of a certain country will be. Fore-knowledge about these critical factors helps Forex traders to better plan their trades. There are still some events that come unexpectedly, but those are rare.
Gambling focuses on controlled environments
A 90-minute football match with 11 players on either side, or 12 rounds in a boxing match between 2 fighters. These are all controlled environments with known limits, but the Forex market does not have any limits. So many people participate in the Forex market, and people react in vastly different ways that you cannot know exactly what might happen. This is why we often see record highs or lows between currency pairs following news announcements.
This has both positive and negative effects on the Forex market. On the positive side, profits can be enormous because the markets can move so much in your favour beyond what gambling odds can provide. However, this unpredictability makes trading the Forex markets risky during volatile periods since you can never really tell what’s going to happen, only speculate.
All bookmakers have pretty much the same features
Whether you’re dealing with a London bookmaker or one in the US, the odds of a match or game will be very similar. The reason is that everyone around the world will be focused on the same thing and they will have similar opinions.
When it comes to Forex trading, though, the Forex brokers are very different because they have different regulatory requirements and target customers. It makes choosing the right Forex broker a process of picking the best partner for you rather than taking any bookmaker even if they don’t have what you really wanted.