Is Forex Trading a Form of Gambling?
here’s been a subtle change on the high streets of the UK over recent years. Where previously betting shops were mysterious smoke filled denizens where the errant uncle, father or grandfather wasted a proportion of his wages each week, (in between visits to the local pub), they’re now clean, open inviting places offering a massive range of products.
Similar to the drinks industry, who realised over the past decade they could reach down and get the kids hooked as early as possible with the invention of sugary tasting alcopops, the betting industry has not been slow to adapt in their hunger to ensnare the next generation. Not only are the betting shops unrecognisable, now offering a laid back, leisurely, ambient environment in which to lose your money with ease across a vast array of sports markets, the major firms have also migrated to mobile devices, you can now throw away your fivers and tenners with ease across: iPod, Android or Blackberry devices, and similar to financial markets bet when the markets are in play.
Think Fernando Torres will get a penalty in the match versus Chelsea, after scoring one great goal and then missing the open goal of the season and that he’ll fluff the penalty, then begin to pull his bleached hair out, roll around the penalty area, sucking his thumb whilst crying like a baby screaming, “take me back to Athletico Madrid”? Then there’ll be a bookie that’ll gladly take your money off you in record time.
Those last two paragraphs read as rather arrogant, flippant and dismissive of a massive industry, any apologies will not be forthcoming as it’s quite deliberate. No doubt certain readers will point out the irony that forex trading is still gambling and suggest the methods used by brokers are not too dissimilar to that used by bookies and in some ways they’d be correct. However, there are subtle differences and one massive difference, the massive difference is that your ECN broker wants you to win, his success can only be perpetuated due to your continued success. There is no broker involved in sports betting, there’s a ‘bookie’ and he wants you to lose. They want you hooked, then they want your money, as much of it as possible. They make no efforts to increase your performance and profitability and only increase their supply of apps based technology in order to take your money off you, using smarter quicker methods, through your smartphone.
There may be a few horse race ‘form’ algorithms and certain on line bookies offer systems, the most sophisticated betting algorithms available are still ‘Martingale’ systems; keep on doubling up the bet until you get the winner, then quit and go back to your original level of risk. This system is taken to the extreme at dog tracks where the suggestion is that you stick to a trap number. Not quite Fibonacci retracement or Ichimoku cloud indicators which you can plot on a free charting package, all provided by a broker who wants you to be successful. There’s no seminars from the bookie, no video support, no blogs, strategies, techniques, or support articles, it really is a one way relationship based on the provision of addiction.
The advantages of forex betting or markets betting over traditional sports betting could form a long list, here’s just a few critical differences;
We only bet on two horse races; price either goes up or goes down.
We can stop our race; we simply exit the trade early and as a consequence we immediately reduce our risk.
We can change our jockeys and horses at any time during the race; if you think the other side of your pair trade is the better direction then you can take it at any stage of the race.
We can alter our bet in the race; if we’ve got direction right we can increase our position size. If we’ve got direction wrong we can hedge.
Source: FX Central Clearing Ltd. (FXCC BLOG)