It is argued that trading in Forex and other financial markets (including the stock and commodity exchange market) is similar to playing in a casino; you place a bet on the rise or fall of the exchange rate and if your prediction is correct you win.
Because of this view, many come to the market and start trading by relying completely on their luck. They do not try to form a trading strategy, nor go deep into the study of trading practices. Instead, they trade impulsively, just like players in a game of chance.
As a result, these people suffer great losses and exit the market with negative perceptions about trading in financial instruments and confidence in the belief that people cannot profit in financial markets.
To prevent you from embracing this view and to assure that you can earn from trading in Forex, we must first try to change your opinion on the way of conducting transactions in financial markets. You should forget phrases such as “gambling”, “Forex game”, “financial instruments game”, “currency game”, etc.
You need to firmly grasp a few things in order to trade successfully:
- Forex is not a game. Accidents do not happen in financial markets. Exchange rates are not determined by a tape measure, but from a series of various economic factors.
- Forex does not rely on luck. In order to profit from currency trading, you need to understand the market, know its laws and be able to predict exchange rates. Therefore, before starting to trade, it is important to undergo training on Forex.
- When trading Forex, you need to be able to restrain your emotions and prevent feelings of gambling guide your actions. Knowledge of money management rules and market psychology will help you do that.