The Similarities Between Trading Forex and Betting on Horses!

Filed under: Learn Forex Trading |

 

I am off to Haydock Park today to watch some horse races. Now, you might think that this kind of information has no place on a forex trading website – but I can assure you, that trading forex and betting on horses shares a number of similarities.

 

To begin with, when betting on horses, it is important to look at the form of the horses. This is not unlike using two moving averages to assess the current trend in the forex markets. It is important to try to trade with the current trend (or form) if you can, as this gives you a greater chance of success.

 

If you bet on horses for a living (and there are people who do this), it is important to use a strict method of money management. For example, you should not bet more than 1% of your betting bank on any one horse. This is also true of forex trading, and exactly the same principles should be applied. You should try not to risk more than 1% of your trading capital on any single trade, with there being a general consensus that you should never risk more than 2% of your bank.

 

But the similarities do not end there. When betting on horses, you are also looking for value prices by betting on horses where the odds seem inflated compared to the prospects of the horse. In forex trading, we also look for value prices by trading from retracements in trends.

 

Finally, if you have a horse racing system, it is important to follow that system rigidly and stick to it over a long series of bets so that your edge can play out. This is also the case with trading the forex markets. You have to take a long-term approach, and let your edge play out.

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