A novice trader with no knowledge of the markets tends to jump straight into a trade every time he opens a chart. I experienced this myself when I started trading in the forex market. Anyone can want to trade instantly due to the easy to use Mt4/Mt5 trading platform, all you need to do is enter the position size and click on bid or ask.
Forex is also open 24/5. For some, it’s like a casino on your laptop, where you can place your bets wherever you are. These are some of the reasons why most people think of trading as a form of gambling. Let’s try to discuss the advantages of gambling and the disadvantages of trading to clarify the difference between the two.
#1 Gaming Pro – No analysis needed
In gambling, players do not have the means of analysis in the game to have a higher chance of winning. You can just place a bet and start playing immediately. This is why you always have a 50/50 chance of winning in a risk game.
#1 Cons in Trading – Requires a Little Analysis
In trading, you have two types of analysis, fundamental analysis and technical analysis. In fundamental analysis, a trader has to analyze the economy, GDP, inflation, employment growth and interest rates of a country’s central bank. It takes a long time for a trader to make a decision to start trading on a currency pair. This type of analysis combined with technical analysis is still used by large institutions as they manage billions of dollars in their portfolios. In technical analysis, traders use charts as the primary tool for market analysis. This tool displays a historical chart of the price movement of a currency pair, indicating certain patterns that the price will eventually move towards. In a chart, tools such as price action, trend lines, Fibonacci retracement levels, indicators, and more, are combined to find a confluence zone (an area of ​​the chart where indicators meet at several points. points) to further increase the probability of winning a trade. This type of analysis is commonly used by retail traders. That is why as a trader you need to do your analysis first to have an edge in the market and have a higher probability of winning trades, otherwise you will look like a gambler. The #2 advantage in gambling – No patience required
In the game, you don’t need patience. For what? Games like poker, slots, and other casino games don’t last for hours or days. You just watch the game for a few minutes and then you win or you lose.
Cons #2 in Trading – Needs a lot of patience
The forex market is the most volatile market due to its high trading volume and liquidity, prices rising or falling within seconds. An impatient person will not be able to stay in an empty position for a long time. In trading, there are four styles of traders. Traders hold positions lasting months to years, swing traders last from days to weeks, day traders last minutes to hours but don’t hold positions past night and Scalp traders only last for days, seconds to minutes.
As a result, most novice traders are likely to choose to be a speculative trader who invests in lower timeframes like 1 minute or 5 minutes but is likely to experience market noise. highest school. Most of the time it will be stopped if a new one comes out. Impatient traders often close their positions if the market starts going against them, even if their stop loss has not been affected by the market price. When the price starts to resume its trend, the trader will realize that if he had been patient enough, he could have had a better trade. This is why trading requires a lot of patience to become a consistently profitable trader.
#3 Advantages of Gambling – Only poker games require great discipline
All games of chance require a little discipline, but poker games do not. In trading psychology, poker is always compared to trading. Professional poker players need great discipline to be a consistent winner. Perhaps if you want to be a player I would recommend starting a career in the poker game. It has a higher probability of winning a game than other casino games.
Disadvantage #3 in Trading – Requires Great Discipline
Great discipline is the hardest to achieve. Only a few strong-willed people can do it. Usually a trader plans his trades for a few hours, but then if someone tells him a good trade or he finds a better one, most of the time he will do not trade what he intends to change. He will probably follow the advice that he should trade. Or if this trader has a system that forces him to only trade twice a day, even if those 2 trades lose, he should not trade anymore.
But usually when a trader loses a trade, they most likely take revenge on the next trade and forget to follow their daily rules. If you want to be the successful trader everyone dreams of, you really have to practice a high degree of discipline. As the good old pros always say, “Plan your trade and trade your plan.”
