The Mentality of a Gambler When Trading: Do You Trade Or Play the Odds?
Trading has never been more manageable and comfortable than nowadays and it has the awesome potential to be both a reliable income stream and profession for numerous individuals.
The fact that there are so many different people trading on the financial markets is what gives them their captivating dynamic, competitive edge against major financial institutions and lightning-fast computer algorithms.
Some confuse Forex trading to gambling, as opposed to what it is, which is investment. Investing requires thorough analysis and preparation, which leads to precise execution, as opposed to gambling which can literally be done based on a whim or thought.
As a result, the highs and lows of trading may be both exhilarating and debilitating. There’s no need to be shocked that these kinds of activities might become problematic due to addiction. Trading and addiction can be closely linked.
Trading Forex on a day-to-day basis as a profession, calls for a significant amount of specialised understanding, stress, stretch, effort, theoretical preparation and self-control.
It’s also worth noting, that it’s not uncommon for rookie traders to think about financial markets as if they were heading to Vegas. They do this in hopes of exiting the market with riches.
When trading comes into play, countless people don’t comprehend fundamental concepts like risk and return because they’ve been bedazzled by the hypnotising power of the “get rich fast” scams. Most of them will come out broke.
We may compare the (Forex) market to professional gambling in a commercial sense if you know what you’re doing; nevertheless, it should not be compared to gambling in casinos since investors make purchases rather than placing bets.
Here’s how we define “gambling”
“Exposing oneself to the possibility of losing in a game or wager.”
“Engaging in a game when the stakes are monetary or valuables.”
“Putting one’s self at danger in order to get something in return.”
As an alternative, gambling is described as putting money at risk on games of pure chance, with no consideration for the player’s ability or knowledge.
Are there any commonalities you’ve noticed? It’s a matter of risk and loss. A trader in Forex is aware of two things above all else: first that there is always an element of risk and second, that at some time or another, they will suffer a financial loss. Forex traders have to deal with this and adapt to it.
Be prepared to be surprised by what is true.
Here’s the big catch: when seasoned traders at major banks and hedge funds log on to their trading platforms, in reality they are engaging in a high-stakes bet and incurring a considerable risk each time they do so. A BIG caveat is, their gambling style differs fundamentally from 90% of retail Forex traders.
The concept goes by the name “probabilities,” if you’re wondering. Develop a Mindset of Probability!
It all boils down to placing trades where the likelihood of winning outweighs the risk of losing. Trading is kind-of-like gambling that’s as risky as rewarding. Before placing a trade, we’re required to examine the market’s history.
The thought of going to a casino and being able to look at the dealer’s hand before choosing whether or not to make a bet. That’s how Forex works. As a Forex trader, you have we all have an edge but you must utilise it wisely.
The greatest money is spent on the casino way of life. At such periods of confluence, savvy traders get out of the market or hedge their bets since they don’t know what the conclusion will be and because making educated guesses is not a feasible strategy.
Meanwhile, the gambler trader goes all-in, opening enormous positions as their focus is firmly planted on the positive side of the equation, causing them to be oblivious to the high stakes involved in making a blunder.
Knowing what is unfolding and then placing oneself appropriately in advance is the most important factor in determining whether or not one will be victorious.
The casino mindset predominantly impacts novices since it is a natural result of having a fundamental ignorance of the financial markets and their volatility. A desire to master the fundamentals of tactics, position-sizing and optimistic anticipation offers the necessary upper hand needed to perform.
Even if they fail, many of these people will eventually come to grips with their failures and use them as a wake-up call. If they don’t get exhausted from their casino mentality, new traders can soon lose all their funds but veteran traders will endure, adapt and persist.
This may emerge anytime greed triumphs over self-control.
You seem like you could be trading, but I thought you gambled.
For the time being, let us return to our casino scenario. Casinos can teach us a thing or two about running a business. I must say that taking a cue from the casino industry is a good place to start. Any trader who wants to be thrive in the foreign exchange should make it their mission to trade their account the same way a casino proprietor would operate their company.
The proprietors of casinos are well aware that they will suffer financial losses for many of their clients; unfortunately, this is an inevitable result of running a business. There is a good chance they’ll earn a profit this year since the stakes are so high against their customers.
In addition, the next time someone asks whether you like gambling, respond with the following phrase: “of course, but only when the chances are stacked in my favour”. Then watch for their perplexed facial expressions.
Forex trading is not a form of gambling, so keep these considerations at the forefront of your mind at all times. When you come to terms with this, your ability to make decisions improves and you open yourself up to the opportunity of learning how to formulate trading methods that result in scoring positions.
Trading forex is not at all like playing the slots. In trading, like in any other industry, there are inherent dangers. Trading is only unethical when the individual engaged in the activity acts irrationally rather than prudently.