Is investing in the stock market similar to gambling?

It betflik 5g is quite common to hear these days that the financial market and forex trading are “just gambling” or the same as “a visit to the casino”. Therefore, we will now bring a little more clarity to this statement – ​​whether it is true and what are the similarities and differences between forex trading and pure gambling.

What is gambling?
Gambling is placing a bet on the outcome of an event, an event with an unclear and unpredictable outcome, with the aim of obtaining a profit or an advantage but also with the possibility of losing this bet. Gambling is a major business worldwide with an annual revenue of over $370 billion. Throwing dice is the oldest game of chance. Archaeological discoveries reveal objects representing an ancient form of dice 40 thousand years old. These are made from the ankle bone of a sheep or a dog.

Dice is the oldest game of chance

In Egypt, objects used for gambling dating back to 3500 BC have been discovered. The drawings show how the Egyptians threw a bone of lamb or leg of a goat. The oldest known game of chance is the game of dice. According to Sophocles, they were invented by the Greek Palamedes during the siege of Troy. Herodotus tells us that dice were also used by priests and magicians to divine the future. The Greeks considered them a symbol of aesthetics, for this purpose they made dice from bronze, onyx, alabaster, beef horn, marble or ivory.

What is a casino?
Casino is an entertainment place where you can bet on games of chance. Visitors are offered opportunities to earn money by participating in various activities (roulette, dice, cards, slots, etc.), with the casino receiving a portion of the money invested by customers. In recent years, a great interest in online casinos has been observed. The emergence of new technologies on the Internet attracts more and more players. Gambling fans already have the opportunity to enjoy the variety of games offered by a casino without leaving the comfort of their home.

Now, anyone can, very easily, quickly and conveniently, choose an Internet casino and start betting. And here is the first analogy with forex trading, which is also extremely easy and affordable to do. Of course, there is nothing wrong with this.

Are investments gambling?
Now back to the popular idea that stock investing or currency trading is like betting in casinos and is a “form of gambling”. Is it so? Let’s look at these two activities up close and find out the similarities and differences.

Risk management

In terms of risk management
Both Investing and gambling involve risk and choice. Both the gambler and the investor must decide how much they want to risk. Some traders typically risk 2-5% of their capital on a trade. Long-term investors often diversify across different asset classes. This is essentially a risk management strategy, and allocating your money to different investments will help reduce potential losses. Players must also carefully evaluate the amount of capital they want to put on the table. Gambling odds are also a way to gauge risk for potential profit. The amount to be paid is the bet on the table. Most professional players are quite adept at managing risk.

Another key difference between the two types of investments is related to time. Gambling is a limited event, while investing in currencies in the forex markets can be for several years. In gambling, when the hand is over, the opportunity to win is gone. You either win or you lose. Investing in stocks at the same time can be profitable over a much longer period of time. Investors who buy shares in companies that pay dividends are rewarded for the money at risk. Companies pay money regardless of capital invested. Investors are aware that dividend yield is a very important component of making a long-term profit.

Who has the bigger advantage – the players or the investors?
Both investors and players are looking for an edge to improve their results. Good players and investors study the behavior of their opponents or the RTP of the game in one way or another. Poker players usually look for cues from other players at the table, as well as study their competitors’ mannerisms and bets. The information collected can help them predict their movements.

Making profits

The main purpose for which investors target the forex market is – of course, making profits, which is obviously the objective of the players (beyond the addicts) as well. This is no secret to anyone. The problem is that investors, who target the market with the idea of ​​profit, often turn their backs on the fact that the markets are not only profitable. The pursuit of profits blinds investors. To be successful in the forex market, you need to look at things realistically. Markets not only win but also lose. Losses are a normal part of the investment process. Therefore, do not set unrealistic goals. The chance of making a large profit from a few trades is quite small.

Overconfidence in the market can cause you to lose, often even your entire investment capital. This is especially likely to happen with inexperienced investors who trade based on short-term price changes. Statistics show that these types of investors often lose all their capital in just a few months. Patience and discipline are two skills you must have, whether you choose gambling or investing in the stock market.

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