How to play forex?

In an era of fierce competition over customers’ attention, gamification elements have proved to be an effective way of standing out. Making your service interesting in a moment-to-moment context has had an enormous effect on businesses in various industries.Forex Trading, of course, wasn’t immune to this trend. In this article, we will discuss how gamification and gaming trends have impacted trading, and what that could mean for traders.

What is gamification?

Gamification is a process of implementing game-like features into various services. Take Duolingo for example.

Most of us have enlisted the help of the green owl to learn (or at least try to learn) a language. However, the success rate in doing so is far smaller than the popularity of the app would indicate.

Duolingo itself agrees, saying that it isn’t possible to become fluent in a language solely through the service. So why do so many people use an app that most likely won’t help them with their goal?

There are different reasons like motivation, encouraging consistency, or simply Duolingo being a good springboard into language learning. However, its popularity is in no small part due to its excellent use of gamification.

You get experience after each lesson, access to ‘secret’ levels upon completing certain conditions, a leaderboard, achievements, and various badges. There are also satisfying pings, a cute avatar pops up occasionally to encourage you, and the characters that ‘speak’ to you become familiar over time.

All of these are gamification elements, and they do wonders in making the experience more enjoyable, along with being somewhat powerful mnemonic devices. However, they also mask the simple fact that you’re not learning as much as you could be.

Gamification in forex trading

In trading, gamification looks a bit different but follows the same general principles. You might see leaderboards, accumulate points to reach certain thresholds, get badges, and the like.

Another thing you may see in gamification-heavy brokers is a significant focus on design.

Presentation and making the user feel good are central tenets of gamification and often, they aim to overwhelm the user and stop them from noticing the often sub-par substance.

However, gamification elements aren’t inherently bad. They also provide additional motivation, make trading sessions more enjoyable, and give you more trading longevity. The concept is simple; the more fun you’re having, the more time you’ll be willing to spend, and that cuts both ways.

There isn’t an exact way to balance out the potential benefits and drawbacks. However, one way to make sure that you’re still getting a competent service is to simply step away from your trading platform. That way, you can write down the exact conditions it offers and compare it with other options.

If the other brokerages you could use functionally outperform yours by a significant margin, it might be a good idea to consider switching. However, if other options offer a similar cost structure and functionalities, the longevity and increased enjoyment may be worth it.

Gambling vs gaming; Why forex trading can’t be the former

Another sentiment you may find online compares the trading and investing world with gambling. However, this opinion lacks nuance, which is why it’s important to understand the difference between gaming and gambling.

Imagine a roulette wheel. The ball is put in the middle, the wheel spins, and the ball lands on one of the numbered fields. The result of the spin, of course, is completely random, with the only regularity being that each outcome, over thousands upon thousands of spin, will appear an approximately equal amount of times. This fact, of course, holds no impact on any individual spin.

Roulette is a gambling game, and as you can see from the description above, nothing like trading. There’s no thought process behind roulette, no way to improve your odds (even if some people are vehement about their strategies like the martingale and James Bond working), and the outcome is always entirely random.

On the other hand, let’s look at another game that typically belongs in a casino; poker. While some may consider poker gambling, it’s a game where your skill dictates your success. It’s a game of working with limited information and balancing odds to find your way to success.

As such, it’s a game of skill and falls under gaming, rather than a game of chance. The difference between these two is that a highly skilled poker player will win over someone playing their first hand nearly 100% of the time. However, a casino regular and someone standing at the roulette wheel for the first time in their life has the exact same chance of winning.

Gaming and trading

Traders may find themselves attracted to gaming because there are some similarities. They require managing risk and probability, and people with a similar mindset thrive in both.

A great deal of analysis is required to prosper, and you’re often working with assumptions for information that aren’t entirely clear. You’re using context clues, the information exclusive to you, and knowledge of the broader system to prosper.

However, one big difference is in the social aspect. In poker, for instance, you’re often sitting at a table with a limited number of players.

Over the course of a game, you’ll start to notice play patterns and tells, which you can then use to modify your own playing. However, in trading, the scale is so massive that it’s impossible to do something like that.

Sometimes you can ride waves of panic and excitement, but that’s about the extent of it. Trading is so decentralized that, for major assets at least, it’s nearly impossible to focus on a single entity (or even a group) and improve on social cues alone.

Additionally, trading is a much more solitary activity, traditionally run for profit instead of entertainment. Poker, meanwhile, for most people is fun, rather than a way to earn money.

Playing forex: Is it possible?

So, now that we’ve drawn the line between gaming, gambling, and forex, is there any room for the term ‘play forex’ left in our vocabulary?

There might be. Colloquially, if someone is playing the markets, it could mean that they are simply a good trader. As such, saying someone is playing the forex market may be a simple compliment. Similarly, an unorthodox move that pays out might be called a forex play.

Additionally, and this may be even more applicable, you may have seen the advice to ‘play around’ in a demo platform. That may be the only proper way to play forex, as you’ve got nothing to lose on a demo account.

In other words, you can play out low-percentage strategies just to see how they work out. You may also place high-risk trades just for the fun of seeing how they work out, or trade assets you otherwise wouldn’t. As far as playing goes with forex, however, we wouldn’t go any further than that.

As gamification elements creep in and make trading more appealing, it’s important to remember that the emphasis should always stay on trading potency. Some comfort is nice to have, but it should never come from a significant sacrifice in features.

It’s wise to remember that most forex and CFD traders end up losing money. As such, focus, optimisation, and a clear mindset are crucial for those who want to see long-term success.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.