Forex trading requires time and if you are willing to give time and acquire amazing money management skills, then an average trading system will give you consistent profitability. The Reason why Traders or newbie traders don’t succeed is that they trade Forex as gambling using high leverage trades, emotion, and greed.
No doubt, some percentage of gamble is involved when opening up a Forex position. No expert will tell you for sure what the US Dollar will do today. There are many tools that can be used to help you make a well-informed decision but do not be fooled by so-called Forex experts when they tell you they have it figured out. If they, in fact, knew the key to getting rid of the Forex risk, they won’t be wasting their time trying to talk you into a Forex trader.
No one knows “The Forex Secret”. You know why? Because it doesn’t exist. You can familiarize yourself with all the technical indicators, study fundamental analysis from dusk till dawn, you are still going to be met with a certain factor of Forex gambling.
Although the risk in Forex is a great risk the possible reward is something you cannot ignore. The possibility of making money in Forex trading is so great. See a list of five attributes that differentiate the two industries below:
Before delving into legal issues, the morals, legitimacy, and ethics, why do you think people gamble or trade Forex? The answer is simply “Money.” The amount of money traded daily in the Forex market cannot be compared to that of the gambling arena.
The Forex market is backed by the most important and the biggest financial institutions around the globe. Traders do not trade with the banks, but rather on the retail market. The fact that the market is supported by such an organization provides a much higher level of legitimacy compared to the gambling world. While gambling always encounters challenges on the legal front, Forex is as officially permitted as any other market.
Even as there is a risk factor involved in Forex trading, you are not totally ill-informed when opening a position. Whether or not you believe in technical analysis, or you trade with your face glued to the Forex news, Forex is not about luck. You can choose to observe and examine the Forex market for a number of days before opening a trade. You can also keep an eye on the currency you are hoping to buy, and only then make your move, based on your studies. Such tools do not exist in the gambling world, which leaves you in the hands of luck.
One serious issue with gambling is that it causes addiction. People step into casinos with nothing but their desire to make money. The moment they are unable to fulfill this desire, they try again and it is not long before they have lost all their money, which usually leads them to gamble more aggressively. In contrast, the first rule any trader knows in Forex trading is to leave their emotion out of the equation. But, how possible is that?
It is correct that a very high percentage of traders wind up losing because they trade blindly without a strategy. Before trading a penny, you need to make some serious decisions about your trading goals and limits. The moment you have made those decisions, you must put them into practice using your trading platform. Apply Stop Losses to check your emotion from telling you to keep on trading. Make use of Take Profits to stop your natural human greediness from telling you not to exit now. Stop losses and take profits based on your trading strategies and never on frail human emotions.
These are some of the differences between the casino gambling industry and the Forex market.