Forex gambling or investing

Forex is not gambling at all. The definition of Gambling: Gambling is the wagering of money or something of material value (referred to as "the stakes") on an event.
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Clearly, these thoughts represent a rationalization for loss of profits and economic losses that together with the selective memory for profits and the magnification of being a great investor represent a core feature of pathological trading. Moreover, the narcissism and the sense of infallibility of pathological traders are further enhanced by the continuous reading of financial literature and online forums for traders, in continuous search for possible information to design the next investment.

Should Christians invest in the stock market?

Typically, every trader starts buying specific books on the topic, regularly reads financial literature and also surfs the numerous online forums for traders on the network. Through the reading of the business press, the addicted traders convince themselves to become more and more experienced over time, leading them to believe that their predictions are infallible, resulting in an increasing sense of omnipotence. Pathological trading has negative financial and psychosocial consequences.

Surely pathological trading leads to a substantial loss of money which in turn determines the demand for loans to financial institutions and the family or friends. Often pathological traders lying to their relatives or friends to borrow money or even boasting to be excellent investors able to earn large sums of money.

Sadly, when debts become unsustainable, and this also causes family and legal problems e. In fact, the continued concern over the trading leads the trader to follow the markets constantly. Several traders report insomnia as they are also awake at particular times because of their superstitions or at night to follow the foreign markets, and some report to use substances of abuse especially psychostimulants.

This in turn can lead to mental disorders and some traders reported to trade as a way out from their depression, anxiety or boredom. A particular form of pathologic trading is online trading. In this case, besides being present all the features of the pathological trading, there are more additives and dangerous factors. The screens of the online brokerage sites resemble those of video games, and by clicking flashy colored buttons, it is possible to buy or sell financial instrument of all world markets.

Can Forex & Stocks Trading Be a Form of Gambling?

The network enhances the feeling of keeping everything under control, as it offers the opportunity to know in real time, at any time of day or night, the performance of Stock Exchanges. In addition, it is very easy to open an online trading account, and online brokers do not warn about the possibility of developing an addiction to trading. This is particularly dangerous because any person without adequate financial education can open an account, operate instantly and easily upgrade the account to advanced and risky form of trading such as margin trading borrowing against equity and short selling sale of a security that is not owned by the trader, or that the trader has borrowed.

In conclusion, we believe that pathological trading is of significant importance for public health and research could lead to evidence that this disorder deserves to be considered a disorder in its own right. It reflects the concept of addiction defined by Goodman, 6 since it presents both dependence and compulsion. As with other forms of addiction whether they are by substances or behavioral , should be designed specific assessment tools to conduct epidemiological studies to determine the prevalence, clinical course, and possible biopsychosocial influences.

Clinicians need to be aware that this form of addiction can pass unnoticed for a long time and could be misunderstood by both the traders and their relatives, as the financial losses are more easily attributed to wrong investments that a pathological compulsive behavior. Finally, evidence resulting from research on this topic might help policymakers to regulate this phenomenon, as it was done with pathological gambling.

National Center for Biotechnology Information , U. Journal List Addict Health v.

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Addict Health. Author information Copyright and License information Disclaimer. The Editor Trading can be defined as the activity of buying and selling financial instruments such as stocks, bonds, futures, commodities, and currencies i. Table 1 Pathological trading-proposed criteria. Find out more here or read to the end of this article. Chasing losses is one of the most common ways people gamble on the forex market.

It is where traders lose money and immediately try to recuperate their losses by placing further trades. This kind of behaviour mimics that of a casino gambler who has lost a bet and places a further one to regain their losses. What develops is a vicious cycle where the trader keeps trying to win back their losses by making bigger and bigger trades.

Not only to regain what they lost but perhaps to also finally make a profit on top of their first initial trade. Things can then get even riskier if a trader decides to involve leverage in this awful downward spiral. Instead of accepting this loss, the trader panics and automatically opens a new position, without even looking at the opening rate with a larger lot, one that, according to them, will recuperate the previous loss and may bring in a profit. But instead, the trade results in an even bigger loss.

Again, the trader panics and attempts to regain everything they have lost so far with another bigger trade. One that will make back everything from the first trade and the second trade, and maybe make the profit the trader initially wanted. This process repeats itself until the trader is left with nothing. Of course, they may make some money back at certain points, but eventually, they will lose everything if they continue down this path. This is what we often call beginners luck. But the thing about beginners luck is that in many senses it can be more of a curse.


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To make things worse, they make bigger trades. Gambling addiction is just like any other form of addiction and there are a number of signs. Here are some of the most noticeable:. If you think you or someone you know may be struggling with gambling addiction, you should reach out for help from a reputable organisation that can deal with it, such as the NHS. First and foremost, if you have a history of addiction, specifically gambling, it is probably for the best to avoid forex trading or any other form of trading for that matter.

Unfortunately, it has to be said that forex trading is not for everyone. If you are new to trading it is still possible to reverse the process.

START TRADING IN 10 MINUTES

But you need to mentally accept that you need to change your approach and that you need to learn more. In fact, the best way to avoid gambling everything away when trading forex is by learning how to trade. All beginners should start with a forex trading education first. You will never see a professional trader open a trading account, gamble away their deposit, fund it again and repeat. Professional traders have learnt not to make the same mistakes twice , to set themselves goals and limits, and practice different trading strategies.

They know exactly at what point to enter the market, how much they want to make and at what point to exit their position. They know this because, on top of being taught how to trade, they watch and analyse the market, which informs them when to act. Professional traders have the skills to look out for trends, use tools to predict where the market is heading and, of course, read the news. Experienced traders also understand risk management.

Why Do Some People Mistake Forex for Gambling?

It also means understanding that you could be wrong and what your analysis shows might not happen. You need to have a safety net in place. Most importantly, they know when to stop and accept that they have lost. It is this simplicity in part which makes spread betting such an attractive trading opportunity. Markets are quoted by the broker on the basis of spreads, which indicate the range through which the underlying market or index might be expected to move over the course of the day. However, with dynamic quoting which changes spreads as markets unfold and built in weighting to reflect the probability of outcomes, it can often be quite difficult for traders to call the market correctly, and to squeeze a sufficient profit from their trading.

Financial spread betting might seem easy in concept, it is a notoriously difficult art to master, and one which requires both an intimate understanding of how transactions work, the function of markets and the tools in the arsenal to help traders respond to different situations. While there is no substitute for raw experience, having the knowledge and understanding of your instrument of choice is the first positive step towards becoming a profitable trader with long term prospects. As distinct from regular share trading, spread betting has a number of key benefits, and offers consistent advantages over share dealing in terms of the sheer flexibility and the swift, sharp nature of returns that can be delivered.

Leverage plays a key role, making transactions both significantly more profitable and significantly more risky, and the burden of leverage is not one to be accepted lightly. In spread betting, unlike other forms of trading, leverage is inevitable and unavoidable. However, by taking care to ensure you understand the full implications of each transaction, and by identifying and managing the risks of each trade, it is possible to overcome the hurdles of leverage, and to apply it to your advantage. Markets are the engine of spread bets and all financial trading, and provide the basis for placing trades.

The manner in which they behave and respond to certain changes provides the volatility necessary for financial spread trading to succeed, and by understanding their inner workings, traders can come a couple of steps closer to realising their potential. Similarly, orders remain the core tools of spread bettors, implementing their instructions and delivering the flexibility necessary to guard against unwarranted risks and execute automatic trading decisions conditional on market behaviours. By understanding the way in which markets and orders interact, and the specifics of each order type, we can start to build up a picture of how the tools of the trade can be used to protect capital, maximise profits and lower the risk profile on this otherwise highly risky trading style.

Financial spread betting can be an exciting, fast-moving form of trading, and allows ordinary people from all walks of life to access the markets with very low barriers to entry. That said, the markets take no prisoners, and only by being proactive in your research, planning and strategy efforts can you give yourself the best shot at generating a consistent, aggregate profit from your trading activity. When making a financial spread bet, a trader will decide on a certain amount of money to risk. With any type of financial trade, you have to pay in order to play.

Because the cost of the spread is factored into any trade, the broker is always at an advantage. Because the ask price is always above the current market price and the bid price is always below, traders have to pay the difference before they even enter the market. The current spread is based on a number of factors, including the current spot or futures rate, current market liquidity, the bet size, and spreads quoted by competing brokers.

At the end of the day, the size of the spread is set by the company you choose to trade with.