XMTrading: Forex trading investment is not a game of luck? Why?

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It is often said that in investment trading such as FX and stocks, it is not technical but rather gambling or a game of luck, and whether you win or lose is just a matter of luck. This is sometimes true and sometimes wrong. However, why are there a few people who continue to win despite this?

No investment is 100%

Fundamentally, there is no concept of 100% investment. Some people often use the words “guarantee” and “absolute”, but those who have a strong sense of this concept may not be suitable for investing. Scammers often use these words, but only investment products introduced by scammers are 100% guaranteed to lose. Because it is based on the assumption that you will cheat from the beginning.

On the other hand, it is impossible to win 100% of the time. The reality is that even the world’s genius traders cannot achieve this. That’s why many people call FX, stocks, and virtual currencies speculation instead of investment.

Investing is putting your own money in the hope of making a profit. Insurance and bank deposits may be a good image. There is a risk of losing the principal, but it is unlikely that a sudden change will cause a big loss.

Speculation often refers to FX and stocks. Speculation is an attempt to profit from short-term market fluctuations. I think that the word “pottery” fits well with the market, which is prone to sudden fluctuations.

Winning traders don’t have 100% win rate

From the outside, winning traders appear to be winning 100% of the time. However, the reality is not so sweet. No matter how winning a trader is, there will always be times when they lose. It is said that even winning traders can only earn a 20% annual interest rate. This is the winning rate of the world-famous investor Warren Buffett. Even such a famous person only earns a 20% annual interest rate. To survive into the future, make the most of safe capital management. A stop loss of 1% to 2% of the total capital is appropriate for one entry. It is also important to predict and verify positions every day.

The element of luck is inevitable in Forex

Market movements are random. Therefore, the element of luck is unavoidable. It would be nice if the market always moved regularly, but in reality it is driven by human emotions. Since it is not a game with a 100% winning rate, there are winning streaks and losing streaks. Therefore, the reality is that you cannot escape the element of luck. By having important assets and learning the basics, you will be able to continue trading stably. Whether buying or selling, you need to make entry decisions based on evidence. If possible, make use of the functions of tools that suit your individual needs.

Why FX trading is not a game of luck

However, on the other hand, there is a reason why FX trading is not a game of luck. This is because the following information and reasons are available for reference. It is not enough to just go for it or see it. Before doing technical analysis, you need to judge the trend on the chart and find the possibilities. You need to understand the relationship between economic indicators, the market situation and its influence, and think about the flow. You need to be creative in order to capture the rising points in the market and avoid losses. Learn from past markets, earn money steadily, and investors need to learn conclusions, theories and ways of thinking. The content is deeper than you think, and knowledge of foreign exchange (currency pairs) is essential.

You can control the odds of winning

FX has the advantage of being able to control the winning rate. This is because the entry point, profit taking, and loss cut points can be determined by the user. In pachinko and games, the winning rate is often controlled, but in FX, the winning rate can be changed by the user’s strategy. However, it cannot be 100%. Even with the same investment, the timing of settlement can be controlled depending on the spread. Even with a small amount of capital, it is possible to receive a large return by utilizing leverage. Official exchanges do not usually control the market. Even if you have worries, you will eventually be able to win by repeating the process.

Market forecast

Forex market prices fluctuate greatly due to economic indicators and politics. Most Forex websites emphasize economic indicators, but in today’s world, wars are a reality, so politics is also a big factor. If you expect a big event, you can take measures to prevent losses in advance by not entering the market in the first place and doing nothing. If you become a professional who can check and manage multiple detailed market prices, you will be able to make large profits. If you can place orders by rate or company unit, you will be able to enter more often, which is advantageous.

Any method

The reason why FX is not a game of luck is that if you fight with a set method, you can increase your win rate to over 50%. If you fight with one method thousands of times, you will be able to see the entry timing, profit taking, and stop loss points. By mastering it, you will be able to see where you are more likely to win. Since there are no restrictions on the method in FX, you can decide how to fight yourself. In the case of your first stock investment or FX, it will take several years to be able to make a living from it overall. It will take a little time overall before you can clearly handle it as an expert, so keep an eye on the future.

Free entry timing

Basically, you can choose the timing of your entry whether it’s stocks or virtual currencies. In other words, if you pick only the places where you have a high chance of winning and enter, you can increase your chances of winning. It is often difficult to decide the timing yourself when gambling, so you can see that FX is different. Use moving averages and other methods to enter each time with your own reasons. Please do not use settings such as automatic trading. It is also very important to check the exchange rate on the news. Make sure you have a certain level of understanding when managing your assets.

Review trade results

It’s actually difficult for traders to find out why they lost, but if they lose, it’s important to do a thorough analysis. Trade results are directly linked to your actions.

  • bad luck
  • Was the market analysis wrong?
  • Didn’t you follow the trade rules?
  • Were you emotionally disturbed?

When you lose, it is important to review the above carefully and make use of it next time. By doing this, you can increase your odds of winning. If you repeat this cycle, you can increase your winning percentage.

If you are interested, please open an account. If you are unsure, you can also create a demo trading account. XM is one of the world’s most popular Forex brokers. You can trade with confidence.

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