Forex game - speculation or gambling?

I caught up with my brother over lunch some weeks back. The topic of forex crept in after a while. He still sees forex as a form of gambling and I tried to make a distinction between speculation and gambling!








Gambling as I see it is a game one leaves to chance. If you throw a coin thousands of times, we all know each side has equal probability of 1/2. Hence one may win after a few trials with 'luck'.

All casinos games are biased in favor of the dealer with odds stack against you! So we really need LUCK, and lots of it, to win consistently! In this regard, forex is similar. Forex is not a balanced coin! The spread of currency pair is stacked against you. It is only one among many more complex factors. If you trade randomly over time chances you will loose money.














So how does forex differ?
Well, I said, there are technical analysis tools and charts. If one monitors economic and financial news and made a judgment call of the trend, it can be profitable when correct or punishes by the market otherwise! Knowledge and skills in combination are the edge in making good calls.













He then added, "I see the same with many people who lost fortunes gambling and punting in horse racing. They studied the horses with published news, wins statistics and monitor their pre-race physical conditions, doesn't it sound similar too?"

I admits he made a good point. My opinion is in both instances elements of gambling and speculation co-exist. The boundary is Grey if any. One may unwittingly cross from speculation to gambling without realizing when emotions or wins or losses involved.

So the key is "Trade with discipline"... easy said than done - something we heard many times before; but still drift from it often especially after easy wins or pressure of recovering lost positions quickly.