Due to the high risks, forex trading is often compared with roulette wheels. Nonetheless, trading is more of market analysis than gambling, and profit is not an issue of probability but needs sharp anticipatory and risk-taking skills. While in gambling,the major feature is the contribution of chance. It’s always about skills when it comes to currency trading rather than sheer possibilities.
Proper Analysis with Strategy
Forex market is open for 24 hours; new traders often suppose it as a gaining opportunity. But excessive trading without a trading strategy leads to higher losses and tiny gains. Professional Forex Trader formulates a suitable trading plan and strategy and sketches a suitable entry point prior to jumping into market. A gambler basically hops into the market for the sake of making money.
Factor of Risk Management
Trading and gambling have a comparable association of chance, but they are quite different. A gambler is totally ignorant of the risk management tools such as stop losses, a veteran trader employs these to his/her benefit. Gambling focuses on risk based on chance, trading requires appropriate measures to lessen the risks and capitalize on the profits on each trade. Forex is a very fluctuating market; traders require making sure that hard earned money isn’t lost in risks.
Balance of Risk & Rewards
The key dividing line amid a trader and gambler is focus on risk and rewards. Gamblers are blindly focused on recompenses of a definite trade without thinking much for the risks, the expert traders focus more on risk in a particular trade and thinks of rewards after completion of a trade. They seek the success with slightest amount of calculated risks and the most profitability from trading.
Holding the Trades
In a fluctuating setting, it is vital to know the time to sell a losing trade rather than hold it for profits. New traders attempt to gamble for success by holding positions for good profits. Forex trading needs experience and recurring success to correctly anticipate the price movement. Even after ages of trading, losses are common in forex. Knowing when to exit is a quality of a veteran forex trader.
90% of trades in forex suffer losses due to emotional factors and then poor decision making. Gamblers let themselves be restricted by emotions of fear and greed. Forex traders are calm and patient persons who identify the risks in the game and pursue a set target efficiently.