Can Forex & Stocks Trading Be a Form of Gambling?

Forex trading has gone viral and so many people across the world engage in active trading each day. Some do it full time but for most, it’s a part-time activity. Trading is so much easier with trading platforms readily available online. All that is required is registration on a platform you deposit money into it and start trading. Like gambling, there is a promise of good returns on the money you invest. 

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Are you Trading or Gambling?

Trading can get addictive as you chase the next win and the one after that. There is a huge distinction between investing wisely and gambling. The line is blurred for most who believe they are engaged in investing but are not. Since both work in a similar manner, it’s easy to get addicted and not even notice it for some time. Many traders are engaged in addictive gambling and are not even aware of this crucial information. 

To know if you are gambling or trading, start by analyzing why you started engaging in trading in the first place. Was your reason related more to gambling or to investing? Investors understand that trading takes time to bear fruits and are patient with the securities they purchase. Gamblers are not patient and don’t practice delayed gratification. 

Gambling impulses exist in many people but for investors, they are more in check. It’s hard to admit that what you thought was trading is a form of gambling. Understanding the motivations that drove you to trade helps you determine which one it is. In case you realize earlier on you are engaged in gambling and not trading, make the necessary changes. By doing so, you prevent yourself from being sucked into gambling addiction that can be devastating. 

Why Are You Trading?

Are you engaged in trading for the right reasons or is it out of peer pressure? Do you know how to trade? Are you familiar with the concept of delayed gratification when it comes to investing? Understanding why you are trading is the first step to learning if you are engaged in gambling or not. If you got into it because of social pressure from family or friends then this might apply. 

Trading takes time to master and there is a lot of learning material to sift through. Gambling is relatively easier and just requires you to stake money on the product you choose. Chance plays a big role in gambling but when it comes to trading it doesn’t. Every choice and decision you make needs to be informed. 

In case you trade and know what you are doing then that is not gambling even if it’s due to the influence of others. The bottom line is trading requires learning and execution. Having an investment plan laid out before you start trading helps you not be sucked into gambling habits. It means you take time to learn what is needed and have control over your actions or impulses. Unfortunately, many people are engaged in gambling rather than trading. 

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Similarities between Trading and Gambling

To be honest day trading shares some similarities to gambling, especially casinos that many people engage in. The two should never be confused for one another but have a striking resemblance to keep in mind. Once you learn how similar they are, you can keep your trading activities on the straight and narrow. 

While trading, you are involved in odds dealing to get the most favorable outcome for your investment. Currently, many people are trading on shares for companies like Netflix that are generating more interest. Many people are streaming as they self-quarantine and traders take the increased activity to increase their odds. There is a market imbalance and what many traders are engaged in is a form of gambling. 

The odds in gambling are always tilted towards the casino and not the people who frequent it. Chances are high you will bet all the money you have and not win any of it back. Casinos generate billions of dollars in income by stacking the odds against gamblers. The same way these casinos are built is how trading platforms operate. The odds are against you from the start and if you don’t know what you are doing, they remain as is. You end up losing precious time and money. 

Still trading and gambling have a distinction that helps you beat the odds. Chances of winning in a casino are so small but in trading, they get higher the more informed you are. Trading calls for patience because with time you can tilt the odds in your favor. You master the industry and know how to trade properly and soon you have returns on your investment. 

Avoid Trading to Win

Yes, you are engaged in trading to get a return on your investment but if you start only thinking of money, you will fail. Trading requires skill and practice that only comes with time. Delayed gratification is not the strong suit of most who engage in gambling. Your returns won’t be as good to start. But the more you learn the better a trader you become with results to show for it. 

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Making money might be the prime motivator but as a newcomer in trading, let it take a back seat. Master the craft and learn the industry. Start with small trades that sharpen your skills. Putting all your money into one product is gambling because you are trying to tilt the odds. More often than not this doesn’t work in your favor. 

A good trader understands the importance of taking a loss and moving on. Hold on to what matters and discard all the rest. You might not win on every trade you place which is okay. You win some and you lose some. With this in mind, you are more geared to learning rather than playing odds. 

Conclusion

Gambling can overshadow trading if you are not mindful of what you are doing. Know the reasons you are engaged in trading and stick to those that apply to it. Trading takes time and patience to learn. Avoid rushing into it if you don’t have the proper training and information.