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You must strive hard not to consider Forex trading as another form of gambling. All the aspects are there for you to treat it in exactly that way. However, if you persist with such an approach, then the end results will not be pleasant.
Many novices just become hooked on trading because they like the adrenaline rush when they are right. They also feel that they need to feel part of such a large game which involves a massive daily turnover of trillions of dollars. However, if you have such a mindset, then your Forex psychology is totally wrong especially if you are seeking financial freedom from Forex.
Perhaps you enjoy trading on the edge and basing your trading decisions on just your gut instincts. However, without supporting your decisions with solid information, you are basically exposing yourself and your Forex account balance to unacceptable levels of risk.
So, how can you differentiate between when you are gambling and when you are opening a sensible Forex position?
One of the main differences is information. For instance, if you possess little and poor quality information, then more likely your trades will just be gambles.
If you are a trader who studies just very short-term charts to evaluate your key Forex parameters such as support and resistance points, then you are still gambling. Similarly, if you trade fundamental news events in a mindless way without grasping a full comprehensive of market expectations, then again your approach is very amateurish and doomed to failure.
In contrast, if you trade using a well-developed and thoroughly tested strategy, then you can consider that you are making a serious effort because your chances of success are greatly increased. You must understand quickly that there are no magic formulae or mystic chants that you can utilize to ensure instance Forex success.
Instead, you must approach your Forex trading with a professional mindset knowing that to achieve profits will require significant amounts of hard work. Forex is such a complex subject that even such an approach will not guarantee you success, but at least your losses will be under much better control.
If you undertook a comparison between performing these two types of trading, then you will be quite shocked at the end results. When you trade just on your whims and impulses, then you will subject yourself to an emotional roller-coaster as you witness your account balance fluctuating rapidly. Eventually, you will almost certainly lose all your equity using such an approach.
In contrast, if you were to trade with discipline using concepts such as risk and money management, then your experiences should be completely different. You will find that you will make fewer, but more careful trades. As such, although you may not realize constant profits, you will notice that you are losing smaller amounts. These are good signs because preserving your bank balance must be your number one priority. After all, you will no longer be able to play the Forex game without money.
