For some people, trading financial instruments is a great way to make money, while others believe that trading currency pairs is gambling.
The Foreign Exchange is an innovative, busy and energetic financial market — and the biggest in the world by trading volume. Allegations of Forex being gambling create unnecessary and unjust confusion. Gambling or gambling is not justified because guessing the score of a match is something that cannot be predicted. Then some people also ask, what about forex trading？ Does forex trading include gambling too？ Let’s discuss it slowly.
Even though forex trading is said to be a business, many people still sneer at this business. Some say forex trading is gambling or gambling, some say forex trading is an obscure business, and some say forex trading is fraud. But we think the people who say this are people who haven’t tried or researched this business in depth. Usually these people only hear people’s words, not find out the facts. People who say negatively can be caused by experiencing losses from the business, or being disappointed with the forex sales themselves which can be said to be miss-selling or cheating when selling. Even if you know more deeply, forex trading is not as bad as people say.
The definition of trading itself is trading or buying and selling something. Forex trading is buying and selling currencies where traders can benefit from the difference between buying and selling. However, some people think that forex trading does not have a solid foundation and can be equated with gambling. The fact is that forex trading is not the same as gambling and has many significant differences. The following are several reasons that can strengthen why forex trading is not the same as gambling or gambling.
The main actors of the Forex industry are the broker who provides the trading services, and its clients, regular people who use these services. Also, Forex brokers rely on the essential relationship with liquidity providers. They function as mediators who are required to give traders access to the Forex market, offering the most accurate value estimation for the traded currencies.
• Forex Trading Done with the Basics
When we refer to Something that is difficult to predict, we can say gambling. It’s like you roll a dice, you can’t predict what number will come out right？ Meanwhile, the forex trading business is something that can be estimated. You can view charts of price movements and then perform technical and fundamental analysis to read future price movements. This means that forex trading has a strong basis for making decisions. Forex traders can also use analytical tools, namely indicators and analysis techniques to read the market. Meanwhile, in gambling, we cannot do analysis and decisions are made based solely on luck and feeling.
• Risks in Forex Trading Can Be Limited
Forex trading has controlled risks. Forex traders can use various methods provided by brokers such as stop loss to control risk and limit potential losses. Then you can also use trailing stops which allow traders to set price limits that move dynamically according to price movements. For example, if a trader sets a trailing stop 300 pips above the current price for a long position, the position will be closed automatically if the price drops 300 pips from the high that has been reached. By using trailing stops, a trader can limit potential losses if the price moves in the undesired direction, while allowing profits to continue to climb if the price continues to move in the desired direction. Obviously this is not the same as gambling, where the risks cannot be controlled and the potential losses are unlimited.
• Prices in Forex Trading are Really Real
Many say that the price on the forex trading chart can be set by one party. But in reality this is not the case. The price on the chart is something that is purely happening in the market because forex trading has high transparency. The price on the chart is without intervention from any party. The forex market is the largest financial market in the world. Every day money rotates because all over the world there are currency transactions. Starting from a network of banks, brokers and other financial institutions that are connected electronically. Then what about gambling？ Certainly the value stated is not transparent and can be regulated or influenced by related parties.
• Forex Trading Has Its Own Regulations
Each country has its own rules regarding forex trading. Many countries have issued strict regulations to regulate forex trading activities, such as setting limits on leverage and ensuring the sustainability of customer funds. For example, the FOREXimf broker, which already has a license to operate in Indonesia. For regulatory details you can see here. In Indonesia, all forex trading brokers must be under the auspices of the Commodity Futures Trading Regulatory Agency (Bappebti). How about gambling？ Usually they carry out their operations secretly or secretly because they do not have a license to operate in Indonesia. For people who gamble, of course there is no guarantee that your funds will be safe.
With the above few points we can strongly disagrees if forex trading is equated with gambling. Those four reasons are the basis. Forex trading is purely a business. To get into this industry requires training, planning, strategy, and of course capital. Those who don’t follow these rules, might be kicked out quickly from the forex trading scene.