Is trading like gambling?
Trading is often associated with gambling because in both activities there’s the potential for gain and many unknown elements.
However, you probably read this in many articles: the Financial Market is not a casino. In fact, Financial markets and especially Forex have nothing to do with gambling. Forgetting this principle is the surest way to see your capital disappear quickly. Trading platforms, for most, never forget to remind their clients. This is one of the highlights of Tradeo, the leader in social trading, which has been investing in better training for its clients.
Trading and gambling
Yet, while everyone agrees that these two worlds have nothing in common, no trader can deny that when investing in the markets, the taste of the game is sometimes felt, as well as the appetite for risk. The vocabulary used is misleading. Don’t we say we play in the stock market as often investing?
The aim is also the same for both areas: profit.
The truth is players and traders require common qualities. They must be calm in any situation, resist stress and focus hard. Similarly, they must make important decisions for their investments, integrating unknown variables in a highly unpredictable setting. Both must develop strategies or change them quickly. More importantly, players and traders must accept the risk of loss and must know when to stop.
In the end, it is undeniable that the character traits and qualities needed to be a successful trader are often the same as one finds in a professional player. One can even say a good trader would make an excellent player. But the comparisons end there, because the reverse is not true: a gambler does not automatically make a successful trader.
Trading is not playing
Often when we start on the stock exchange, trading can actually look like a casino. It is a mistake that most rectify quickly. Relying on luck when we want to invest is the best way to lose part or all of our capital because chance has little place in it.
An investor has the opportunity to rely on tangible elements, to use technical or fundamental analysis to determine trends. Investment strategies are always based on hard evidence and a good knowledge of the markets.
Most traders have learned one thing in the markets: Investing is not improvised and training is an essential prerequisite. The majority of Forex platforms today include also free training for their clients, like Tradeo, the social trading platform that just strengthened its free training offer. When you start, you have to be humble, accept slow progress and increase in knowledge. This is the key to success. Although some say Forex is all about luck, the majority will answer that what we call luck is, in fact, knowledge.