Sports Betting vs Forex Trading

Any decision making that is based on educated guess, is still a guess, whether it’s sports betting or forex trading. To better understand about trading you can start with the basics - What is Forex trading. Depending on which approach prevails: technical analysis based on historical data and news or gut feeling, there is an easy transition from “gambling” to “trading” or vice versa.

KEY TAKEAWAYS

• In their essence betting and trading deal with the same idea - using their own money, facing risks in order to win more money.
• Do diligence is not negotiable whether it’s a betting or trading.
• There is one big difference between betting (gambling) and trading, you should take away from this article - in gambelling odds of winning are always on the “House” side, meanwhile in Forex trading, traders are the “House”. Odds of winning are on the side of traders, especially those who have better trading strategies.

Betting vs Trading

Both Betting and Trading involve risk in return for rewards. Both if done well (research, preparation, dogged news analysis) can be profitable, yet it would be misleading if we don't mention the factor of chance.

In the context of betting vs trading when gambling, the house always stays one step ahead of its players and wins in the long run by turning the odds to its advantage.

Forex traders are their own “houses” - they can use various techniques to flick the odds in their favor. Thus, trading practically is more favorable for making money: lesser risk, subject to laws of supply and demand and “House” is the trader. Betting vs trading 0:1.

What is Trading

Essentially, everything we buy or sell is trading money for the goods or services. Trading Forex f.e. has more variables to juggle with, hence more difficulties winning big, but at the same time more tools let traders have controlled prediction.

There are many tools that can be used in order to help traders make a more educated decision, however there is a factor of uncertainty that can’t be predicted.

What is Betting

Sports betting is an activity of predicting sports results and placing a wager on the outcome and it has a bad ring to it, since most of the time it coincides with gambling.

And gambling issues is something you wouldn’t wish on your worst enemy. Interesting that some describe bad trading as gambleling.

Difference Between Trading and Gambling

One important difference between trading and gambling is that when you go out to gamble, you have a negative expected return - the “house” is always expected to win.

Trading, however, if done skillfully, can put the trader in the position of the “house”, hence odds could be in favour of the trader.

Investors in Forex can be classified in to two types: those who bet and those who trade

• There are people who get in the market without a proper strategy, hoping to run on luck and make money. Those are gamblers and they typically don’t stick around for a long time since they run out of luck pretty fast.
• Investors, on the other hand, are the ones who understand the underlying mechanics of currencies. They have a proper strategy, are well informed, and try to minimize their risks as much as possible through tactical money management.

And typically, they are the ones who end up being profitable in the long term.

Is Forex Trading Gambling

It's often talked about topic in social circles, that gambling and trading are the same. Lack of understanding of trading is one factor right there, of course they have similarities, but only in shared idea.

Trading execution however requires a deep knowledge of trading instruments, dexterous wielding of information and being disciplined enough not to act on irrational thoughts.

Whereas gambling invites poor judgement skills, math problems and willingness to have fun.

It comes down to the approach traders decide to apply while trading. When a trader is oriented more on gut feeling rather than analysis, trading might be considered gambling.

So, is Forex trading gambleing? The answer would be, it depends on how forex trading is practised.

Trading vs Betting

To make the difference between Forex Trading vs Sports Betting real, let us show the process trader and gambler has to go through to make a bet or a trade.

The Bottom Line

Forex Trading can be gambling if you treat it like gambling: no Forex trading strategies, no research, no systemic approach, just luck to run on, will classify your forex trading as gambling.

Because closing your eyes and crossing the road wishing everything is going to be okay can’t play out well in the long term.

Gambling might creep into trading practices, when traders trade for fun, are inconsistent, have a notion that they will win without effort, and that is what makes trading into gambling.

That will definitely lead to profit/loss downward in forex trading and may kill the desire to gamble in Stocks or Forex markets.