Normally, we make analogies between currency trading and other activities to illustrate how to trade Forex successfully. Today, we’re itemising the dissimilarities between Forex trading and something that it’s sometimes wrongly compared to: gambling.
Here’s what takes the place of tried-and-tested Forex trading strategies — the hallmark of the professional trader – among Forex gamblers: blind repetition. They fund £500 accounts, burn them in disastrous, luck-governed trading, then fund them again with another £500, and so on ad infinitum. Until they’re broke.
They should heed Einstein’s pithy observation: “Doing the same thing over and over again and expecting different results is the definition of insanity.”
The temptation to gamble is inherently present: when you begin trading Forex, you’re your own boss and you’re free to make your own rules. That can be exhilarating, but sometimes to the point of addiction, which encourages the mindset of the gambler.
All Forex trading courses worth their salt will tell you from the outset that you learn Forex trading by working as a professional, not a cardsharp.
If you have no effective trading strategy, never use a trading plan, never use trading signals, ignore risk management, concentrate solely on the dream of rewards and profits, trade according to your most intense emotional highs and lows, pursue unrealistic profit targets on the basis of blind hope and trade far more frequently than is wise, then you’re a gambler.
However, if you’ve mastered Forex trading strategies such as price action, use a well-thought-through trading plan, use a Forex trading journal, work hard to follow the best principles of risk management on every trade, abjure the tunnel-vision of compulsive profit chasing, trade only when your trading edge is present, control your emotions upon a win or a loss and treat your trading as a business, then you’re a professional.
Even if you’ve only got one or two traits identified in the first list, break out of them now and substitute the ones in the second. Trade like a pro, not a madcap swashbuckler.