The world of forex trading is filled with less professional investors and more gamblers, and most of them don’t even know what category they fall under.

A professional trader is quite distinct from a forex gambler and there are some tell-tale signs that should enable you identify one.

These signs may also enable you to recognize the gambler qualities within you which you will need to suppress and overcome so as to become the professional trader you are meant to be.

Traits of a forex gambler

There are many tell-tale signs that identify a forex gambler and they include:

• A forex gambler never formulates or follows any trading strategy
• A forex gambler typically has no trading plan that he follows
• A forex gambler never keeps a detailed journal of his trading transactions or history
• A forex gambler pays no attention to risk management
• A forex gambler’s attention is always focused solely on rewards and profits. The quicker the better
• A forex gambler trades mostly on gut feelings and instincts
• A forex gambler frequently stays in the trade with hopes of overturning losses or increasing profits
• A forex gambler trades too frequently and erratically

Traits of a professional trader

A professional trader is the antithesis of a forex gambler in almost every way. These are some of the traits that characterize a professional forex trader:

• A professional forex trader will most likely have mastered at least one trading strategy through continuous learning and by demo trading
• A professional forex trader has a forex trading plan which s/he follows
• A professional forex trader keeps detailed records of trades and transactions in a forex trade journal
• A professional forex trader focuses on risk management and control in every single trade
• A professional trader does not put too much emphasis on rewards and profits at the expense of everything else
• A professional forex trader treats trading as a business or career, not a game
• A forex trader enters trades only when they have an edge
• A forex trader does not trade based on what they are feeling nor do they get emotional over wins and losses

Differences between trading and gambling

We have looked at differences between the gambler and the trader, now let’s detail a few of the most notable differences between forex trading and gambling.

• Forex trading requires skill and professional traders take a long time of education and practice before mastering forex trading. Gambling on the other hand requires almost no skill. All the gambler has to do is use his/her gut feelings to place a bet on where the price of currencies is headed.
• Forex trading can offer consistent, long-term income to the shrewd trader while gambling will be mainly for the short term thrill of rewards rather than any consistent long-term revenue.
• Forex trading is not addictive as most novices who enter the market with big dreams that they fail to realize opt out fast after a few consecutive losses. On the other hand, gambling is highly addictive and losses only serve to encourage the loser to put in more money to attempt to recover what was earlier lost.
• Forex is a serious business and traders do not consider it a game while gambling is first and foremost a game played for fun and may have monetary gains.
• One very important difference between forex trading and gambling is that with gambling, the player will lose more than they will win. With forex, a little bit of education for the trader may result in consistent earnings with few losses. And, this site, www.forextradingbig.com, offers competent and up-to-date forex education.
• Related to the above point, gambling is rigged in such a way that the house will always win, no matter how much one winner takes. However, in forex trading, even your broker is much happier when you earn profits rather than make losses as this means higher commissions for them and a better reputation for their brokerage and their trading platform.

Steps to take to switch from gambling to trading

While looking up the traits of a gambler, did you notice any that you practice?

If so, you should take some urgent steps to turn yourself into a professional trader who will earn reasonable profits consistently over the long term rather than remain the gambler who will lose all their money on whimsical trading.

1. The first step you should take is to adjust your mindset. Set realistic, achievable goals that take into consideration the amount of investment capital at your disposal. Do not over-leverage when making trades and do not over-trade. Take a cautious approach when entering trades.
2. Treat forex trade as a profession that should not be made ineffectual by reliance on emotion. Control any urges and instincts that go against your strategy and trading plan and start basing your decisions on facts as displayed on your price action charts.
3. One of the most important ways to wean you off those gambling habits is by keeping, updating, and regularly reviewing a trading journal. The details contained in a trading journal will likely point out those areas that have worked well for you to be replicated in future trades. Of equal importance, reviewing your historical trading patterns will reveal what does not work and the areas that you need to improve on to minimize losses and maximize profits.
4. The best way to stop trading forex like a gambler and adopt a professional forex trading behavior is by modeling your trading after other professional experienced traders. Following their forex trading strategies will help you learn how to use facts and how to contain your emotions when making trades. It will also open your eyes to methods of earning modest and reasonable profits consistently that over time build up to high incomes.

Summary

A forex gambler is most likely to risk more than 5% of their investments and trade with money they cannot afford to lose.

Such risky behavior cannot be condoned by a professional forex trader who focuses more on money management and control of risks.

Forex trading may bear some similarities with gambling, but the differences are starkly clear.