Is Forex trading considered gambling?

Gambling is a taboo in most countries. Some places where bets are legalized like the UK, gambling or placing bets is acceptable. Even operating online gambling casinos is not permitted in mainstream USA. Gambling on most things such as popular sports including Formula one, boxing, soccer, cricket, horse racing, baseball, basket ball etc.. are still frowned upon, but people speculating in commodities, currencies, properties are well respected. Forex trading software like Stock trading software is well received in the public domain today.

This is one dilemma in life one could say. Actually, as I personally think about it, in daily life you take important almost gambling like decisions whenever you have to choose one of two ways and have no strong reasons of going with any one of them.

The choices you have both carry risk and profits, but you need to use your mind to decide which one of them has lower risk and higher profit and that ratio which ever is acceptable to you. Whether it is a sports match or a personal decision or trying to predict the rain, you will have a lot of reasons and facts to go by, but you will never know for sure, and thus you will need to gamble a bit. This is similar to what you do in the Forex market.

However, what is different in the Forex market or even any security market and property real estate is that your risk is much lower. You have an asset you buy into as against a sports match where your money could disappear end of match if you lost on your bet. In Forex or equities, you purchase a currency or share and if you purchased with a belief it would rise in price then, should it rise you profit, but should it fall, you have a lower valued asset but it is still worth a lot of money. You could hold onto it and let it appreciate over time, making this kind of investment or trading which is akin to gambling much more sensible and lucrative that traditional gambling as it is understood widely !

Those that are in a habit of betting and love to do that for the excitement it provides over and above the profit potential, have it easy as they can use any brokers software and stay online for many hours of the day or night and trade constantly. This is called day trading and is not recommended unless you are able to spend a lot of time learning how to do it for a good profit. The reason is because it is widely said and believed that over 95% of people who are involved in day trading are ultimately losing their money. This is a really scary number so you have to be very careful and do your trading if you want to do day trading. It is also called scalping during short durations and can be very profitable or very loss making. If you have the right idea and know the market well you should profit well. So you can begin to learn Forex using software and initially you will have an enriched Forex trading software experience.

What role does the broker or Forex company giving you an entry play in all this? Well some people think they are speculating or trading against what the broker shows up on the screen as Forex rates. One could not be more wrong. The broker is actually more interested in helping you win money. You see if win or lose the broker stands to gain from his commission or spread. He has no other money to gain if you lose or if you win. But then why do I say he will be more happy in seeing you win? Well because maybe if you keep winning you will keep playing at the Forex market and this way he will keep getting his commissions. It is like buying a car or house. Your broker wants you to be happy, to come back to him and to refer other friends of yours to him so he could keep charging brokerage and make his money. However, with Forex even without referring others you yourself will trade multiple times and make the broker good money.

To succeed with Forex, one of the first things I advice people is to study and research this market as much as possible. You will learn many things as you trade in a demo mode and as you remain in the market and see the fluctuations. This is apart from non practical research you can do by reading online and from authorities on the subject as to what are the best times to trade, the best strategy to trade, the best system and the best method to manage your money. It is often said if you do not manage your money well, even though you know how to profit, you will stand to lose it all.

So if you find yourself smart enough you must take time to learn a lot of things in this market and prepare yourself for the best times of day and weeks when announcements are made when the markets are volatile and its best to get huge swings to profit from. It is best if you read several strategies, choose something that agrees to your mind and then practice it. Once you do that and see it profitable, then do live trades, study it further by refining it. Also if possible maintain a journal called as your Forex journal or PIP journal.