What are the pros in gambling but the cons in trading?

A beginner trader who has no knowledge of the market has a tendency to jump right into the trade every time they open the chart. I experienced this myself when I started trading in the Forex market. Anyone might be tempted to trade right away due to the ease of use of the Mt4/Mt5 trading platform, just enter your position size and click bid or ask.

Forex is also open 24 hours a day, 5 days a week. Some brokers offer 24/7 and due to heavy competition from brokers, some even offer to let you open a trading account for as little as $5. For some people, it’s like a casino on your laptop, you’ll be able to place a bet anytime, anywhere you want. These are some of the reasons why most people thought of trading as a form of gambling. Let us try to discuss what are some of the advantages of gambling but the disadvantages of trading to clarify the difference between these two.

No. 1 Pros in Gambling – No Analysis Required

In gambling, a player has no means of analyzing a game to have a better chance of winning. He can just place a bet and start playing right away. That is why he always has a 50/50 chance of winning a game in gambling.

No. 1 cons in trading: Requires a handful of analysis

In trading, you have two types of analysis, fundamental and technical analysis. In fundamental analysis, a trader must analyze a country’s economy, GDP, inflation, job growth and central bank interest. This takes a long time for a trader to make a decision to start a trade in a currency pair. This type of analysis combined with technical analysis is always used by large institutions, since they manage billions of dollars in their portfolio.

In technical analysis, traders use a chart as their main tool to analyze the market. This tool shows the historical chart of the price movement of a currency pair showing some patterns that the price would possibly go. Within the chart there are tools such as price action, trend lines, Fibonacci retracement levels, indicators, etc., which are combined to find the confluence zone (an area on the chart where the indicators meet at a certain point) to further increase the probability of winning a trade. Retail traders often use this type of analysis. That is why as a trader you need to analyze first to get a better edge in the market and have a higher chance of winning a trade or else you will be like a gambler.

No. 2 Pros in Gambling – No Patience Required

In the game, you do not need patience. Why? 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.

No. 2 cons in trading: it requires a lot of patience

The Forex market is the most volatile market due to the high trading volume and liquidity, prices go up or down in a matter of seconds. People without patience will not be able to stay in an open position for a long period of time. In trading, there are four styles of traders. Position traders that last from months to a few years, swing traders that last from days to a few weeks, day traders that last from minutes to a few hours but do not hold positions overnight, and leather traders scalp that only last a few seconds to a few minutes.

As a result, most beginning traders are likely to choose to be a scalp trader who scalps on the lower time frames such as 1 minute or 5 minutes, but has the highest chance of experiencing a noise from market. Most of the time they will arrest you if a news item gets out. Traders without patience often close their position if the market starts to move against them, even if their stop loss has not yet been reached by the market price. When the price starts to continue its trend, the trader will realize that if he had been patient enough, he should have gotten a better trade. This is why trading requires a lot of patience to be a consistently profitable trader.

No. 3 Gambling Pros – Just Playing Poker Requires Great Discipline

All gambling requires a bit of discipline, but the game of poker does not. In trading psychology, poker is always compared to trading. Professional poker players require great discipline in order to be a consistent winner. Maybe if you want to be a player, I suggest you start a career in the game of poker. You have a higher chance of winning a game than the other casino games.

No. 3 Cons in Trading – Requires Great Discipline

Great discipline is the most difficult thing to achieve. Only a few people with strong willpower will be able to do it. Often a trader will plan his trade for a few hours, but then if someone tells him that he has made a good trade or found a better one, most of the time he will not trade what he had planned. You are likely to follow the one you were advised to change. Or if that trader has a system that requires him to only trade twice a day, even if those 2 trades are losses, then he shouldn’t trade anymore.

But many times when a trader loses a trade, they will most likely take revenge on their next trade and forget to follow their daily rules. If he wants to be the successful trader everyone dreams of, he really needs to practice great discipline. As good professionals always say, “Plan your trade and trade according to your plan.”

In summary. The game is for those people who want to have a good time and have a lot of extra money to play with. While trading is for those people who are serious about making money and are disciplined enough to take a trade.