Forex as a form of gambling

Some people consider forex just a type of gambling, others consider it a platform to implement their strategically planned ideas. Well investing in forex is the blend of two. As we know, basic knowledge is essential for everything, so same is the case with forex. Investing only on the basis of luck with very little knowledge about the forex is nothing but gambling. Gambling is a part of speculating not investing. It is just like spinning the roulette. On the other hand, even having very deep knowledge in forex cannot give you 100% result because you can only study the trends but cannot control them. You can only guess that whether the price will go up or down. You cannot be sure at any point of time and then comes the role of luck.

After you have put all your experience and knowledge in guessing the trend and depicting it, luck factor comes into play. It is truly said that “Luck is what you have left over after you give 100 percent” Because even an experience of 10 years or more cannot guarantee you a sure profit. It is just a matter of opportunity coupled with preparation and effort which gives the desired result. Moreover, luck can favor once or twice but always investing by relying on luck ends up in disaster. Because luck never gives, it only lends. So in forex, luck is important but not the only factor. Novice and inexperienced traders always call forex a form of gambling or a matter of luck because they are not able to study the trend properly and they just invest by relying on their luck. They use high leverage without any money management. So the result is same as this quote states,” A fool and his money are soon parted.”

But if we consider the same trend on the long run, studying the technicalities always give desired results. Because large investment banks, financial institutions do not rely on luck but they do the technical analysis of the trends and hence they make huge profits. So the element of randomness and probability exists only on the short term basis. In the long run, it is the knowledge and experience along with the proper money management that pays. The matter of expectancy plays a major role in forex investment. You will always invest in the currency from which you have positive expectance. The expectancy is directly related to your knowledge and study of the trends. Your expectation is always from those currencies, for which you have studied the trend. So in this way, expectation, knowledge and experience are the three factors which differentiate forex investment from gambling.

Therefore now we are in position to answer the main question in a very compact way that gambling is not same as investing if forex. It is a horse of different color because with knowledge, experience and positive expectance, we can analyze the trend technically and then we can determine the high-return trade positions where the winning of chances are far more less than losing.