Sports Betting vs Forex Trading

Wed, Nov 30, 2022
by CapperTek

There are many options available for those seeking to earn a little extra cash – always an attractive goal, particularly during the current global financial climate. High up on the list of opportunities for modern investors are the avenues offered by sports betting and Forex trading as detailed on sites such as tradingforexsites.com.

For the uninitiated, Forex (FX) is the shorthand version of Foreign Exchange. Forex trading is therefore simply the trading of one international currency against another, hoping to judge the never-ending ups and downs of the market sufficiently well to obtain a profit.

Fans all around the world scour the latest sports news headlines and top tipping sites in search of nuggets of information which help guide them towards the ultimate goal of profit. Likewise, an ever-increasing number of prospectors can be found keeping their fingers on the Forex pulse, in terms of significant global events and the latest investment tools.

Sports Betting and Forex Similarities

Both are Forms of Gambling

Sports betting may be labelled as “gambling”, whilst Forex Trading uses the more widely respected term of “investing”. Despite their varying cultural levels of approval, there is certainly a significant degree of overlap between the two terms. Both do after all involve speculating money, with the aim of gaining a positive financial return, and both involve a degree of risk. Forex trading, in essence, can be viewed as a form of gambling, and gambling when done well is little different from trading – when asking betting exchange aficionados what they do for a living, many will refer to themselves as traders, rather than gamblers.

Both Reward Skill and Hard Work

Forex fans often attempt to extricate themselves from the term of gambling, by stating that the profits they obtain are solely a result of their skills, knowledge, and trading abilities. Whilst this statement is undoubtedly true in many instances, to suggest that such expertise may not be similarly rewarded in the sphere of sports betting is a little short-sighted.

Long-term successful Forex Trading and Sports Betting are both dependent upon assessing the value of the prices on offer. In both disciplines, if you are consistently able to obtain value bets/investments you will win.

Both Involve Speculating on Events Outside of Your Control

Forex Traders, and traders in general, often state the greater levels of control as a major benefit when compared to sports betting. However, at their hearts both trading and sports betting are dependent on speculating on events which cannot (or at least should not) be within your control. Many sports betting strategies are more volatile than comparable trading strategies, but as we all know, uncontrollable and unforeseen shocks and crashes do occur in the trading markets.

Both Enable You to Trade in and out of Positions

One of the major benefits of Forex Trading is the ability to quickly trade in and out of positions – taking a quick profit should the market move in your favour, or possibly accepting a loss should global events conspire against you.

In this area, it is hard to argue that the vast liquidity of the markets does not hand Forex trading at least some sort of edge over sports betting. It is however something of a myth that Sports Betting markets do not provide the opportunity to trade. The strategy of many an exchange punter is based exclusively around price movements, whilst the advent of the “Cash Out” facility now available at many traditional bookmakers means that customers are able to take a profit or cut their losses should they wish.

Sports Betting and Forex Similarities

As we can see, there are perhaps more similarities than you might expect between Forex Trading and Sports Betting. There are however also a few key differences, with the following two perhaps being the most significant.

Forex Trading Enables Trading Over a Longer Time Period

By their very nature, sporting events have a beginning and an end. Whether it be the duration of a soccer match or the length of the NFL season, your window of betting opportunity will necessarily be restricted to the start and end of the event.

However, this time restriction does not apply in the same way to the Forex markets. Dollars, Pounds and Euros have existed for decades, and will most likely exist for decades more. As such, you are able to set your own time frame when choosing when to enter and exit a trade over a much longer period than offered by a sporting event.

Forex Trading Enables Leveraging

In the world of sports betting, if you have $1000 in your betting bank, the value of bets you may place will be limited to this value of $1000. In contrast, many Forex Brokers offer what is known as leveraged trading.

Simply speaking, this allows you to gain full exposure to an exchange market at only a fraction of the cost. As an example, many brokers will offer a 10% leveraging option, meaning that for your $1000 you would be able to gain access to $10,000 worth of price movements. This leveraging possibility is perhaps the number one advantage that Forex Trading has over Sports Betting for those looking to maximise the value of their capital.