Forex Trading Article – I am not a gambler
Alot of times, i have strangers / acquaintance asking me. So Ezekiel, what do you do?
You know, whenever i send and pick my kids from school. It’s always the mothers that are fetching the kids. For me, it’s me and my wife.
The principals, teachers and parents will always come asking my wife, Doesn’t your husband work? What does he do?
My wife would always joke that i’m unemployed. lol.
So the thing is that, I get that question alot of the time.
What do i do?
And when i say i trade forex.
They would go: ahhhh…. That’s kinda like gambling isn’t it?
Have you ever had that question asked to you before?
Forex Traders are not gamblers
At least not me and people who have been in forex long enough.
I do know for the matter of fact that when most who just started of trading forex, they are gambling at a certain level.
But if you have been trading for a while, you will know that had you been gambling, luck runs out. And it’s definitely more than luck for you to be profitable in the long term.
There has to be a proper system to follow.
Even professional gamblers (i mean those who really makes money from the casino eg. playing poker) These guys have a solid system that they stick to and not deviate from.
These guys have an edge.
If we are just gambling based on luck, we do not have the edge.
You know, irregardless of what – The casino have the edge – they eat the rake.
And, forex brokers have the spreads.
Therefore they do not care if you or another guy make money. Because they know, at the end of the day. Irregardless of who wins, they are the big winner.
It’s just like us trading forex.
If you do not have an edge, luck will run out and we will end out loosing like the majority of the gamblers.
So the key is to have the edge.
What is the edge in forex trading?
Having the edge in forex trading could mean many things.
What is the most important is that, you have a good (higher than normal) winning probability when you trade.
If you play poker, every move they make. eg. to bet, to raise, to fold or to shove (all in). They will first gauge their odds of winning, their probability of winning when they make that move.
For example, when a good poker player make a raise (a bet higher than the opponent’s bet) – they have already measured the odds. The odds of the opponent folding when they made the raise, and the odds of the opponent calling when they made the raise.
They want their opponent to do what’s best for them.
To reiterate, on the last example.
If they know they have the best hand on the table (no hand can beat them), and they have calculated the odds that based on the opponent playing style, he have a relatively good hand too (but not good enough to beat the best hand). Good chance he will not fold if you make a raise since he has a relatively good hand.
Therefore, to get more money out of the opponent, and knowing that they will not fold. The poker player will make a raise and instead of just calling his opponent’s bet.
Now i may have strayed a little far off in the poker example. (now you know what i do during my free time ;) )
It’s that every move you make, they have already calculated their chances of winning and use their tune a strategy that fits best in the scenario.
It’s the same in forex
Every time we take a trade, a normal gambler will just check his gut feel. And if he feels good, he will enter on the trade right away.
But a forex trader who has the edge will first calculate the odds of winning. And what are the chances of winning if he will to place a trade there and have a profit target here and the stop loss there.
The trader will devise the best suited forex trading strategy for that specific trade. (read that again many times)
NOW THIS IS THE KEY REASON WHY BANKS don’t use robots to trade – instead they have real traders trading.
It’s because, every scenario is different. And you will need a real person to devise a specific forex trading strategy for a specific trade.
Now, it may seem all complicated here. But when you learn how to do it, it’s really easy.
So ask yourself, do you have an edge in forex trading?
And do you tune your forex trading strategy for every single trade (because every trade is different)