Betting and gaming on the Forex exchange and currency market

Playing at a bookmaker can be compared to investing on the stock exchange or Forex market, but are these comparisons accurate? Do we run the same risk when we buy stocks or bonds or invest money in the foreign exchange market as when we place bets? How much does investing resemble gambling and Where are the chances of profit?

Bookmaker betting, i.e. betting with a bookmaker

Let's start with a reminder of what bookmakers are and what their betting is. Betting involves typing the outcome of a specific event. Most often, bookmakers are accepted for various types of sporting events, so the player can bet, for example, which team will win a given football match. In addition, bookmakers also offer bets on events from the world of politics and entertainment or bets on virtual sports.

Betting consists of several elements. The key is of course selected type that is, what the player believes will happen (e.g. a draw). The game at the bookmaker also requires fixing rates the BET, and therefore decide what money will be allocated to a particular bet. Betting with a bookmaker brings profit when the player correctly chooses the outcome of a match (or other event), and loss – when the type turns out to be wrong. What does the amount of winnings depend on? So the money won is the equivalent of the product of the BET and betting odds who was selected for the selection. In theory, the higher the odds estimated by the bookmaker, the lower the probability of an event occurring, but also the greater the potential win (because the risk of losing is greater). The game at the bookmaker can, of course, be more varied – you can, for example, place multi-bet betting (here the profit may be higher, but the risk is higher) or bet live.

Returning to the winnings, it should be noted that the money earned from the game is reduced due to tax . Firstly, a 12% gaming tax is deducted from each bet at the time of placing a bet, and secondly, bookmakers must pay a 10% income tax on one-time winnings over $ 2280. Most importantly, in Poland bookmakers you can bet only with legal operators . These are bookmakers who have obtained permission to operate on the ground or online from the Minister of Finance. Betting with a bookmaker without a current permit is fraught with high financial penalties. In addition, you need to know that since the game at the bookmaker is qualified as gambling, it is allowed in our country only for people who 18 years old .

Playing the stock market

Although the phrase "playing the stock market" is widely used, the expression "investing in the stock market"is definitely more correct. But because in this article we will consider what unites and what divides bookmakers, the stock exchange and Forex market . the concept of the game seems to be justified in this context. But what is the stock exchange itself and what is investing in the stock exchange? The stock exchange is a kind of system under which different persons, companies or institutions can sell and buy stocks, bonds or other securities admitted to trading . The stock exchange is a regulated market , and in Poland is responsible for running the stock market Warsaw Stock Exchange (WSE) .

How does it work? On the part of companies that sell their shares (usually shares), the stock exchange is one of the most commonly used ways to raise the capital needed for development and further activity. Shares, which are the most common subject of transactions on the WSE or foreign exchanges, are securities that confirm the ownership of a share in the share capital of a joint-stock company. The company sells its shares, and in exchange for the money raised pays investors dividends that is, he shares the earned profit with them (most often once a year). Shareholders also have other privileges, but their goal is only profit, because the game on the stock exchange is supposed to bring additional capital. The money can come from dividends and interest, however, this is a long-term investment in which the risk is less, but the profit is also not spectacular (if at all). Investing in the stock market is often actively buying and reselling Securities and then the investor's profit is the difference between the price of buying and selling shares.

The stock exchange is open to those who have investment account - all securities purchased by the investor are stored on it. To open it, you need to visit a brokerage house or open an account via the Internet (keeping an account costs about a few dozen dollars a year). The brokerage house must have a license issued by the Financial Supervision Commission (as well as bookmakers , also the broker needs special permission). Brokerage house a set Commission for each transaction (the same as b ukmachers who impose their margin on bookmakers), however, this is an unavoidable transaction cost. Investing in the stock market cannot take place if it is not mediated by a licensed brokerage house. Deciding which stocks, bonds, etc. buy, sell and when to do it belongs to the investor, while the broker is their executor.

One of the basic concepts when it comes to investing in the stock market is stock index which allows you to quickly understand what is the current situation on the WSE, including in relation to a particular sector of companies. The Warsaw Stock Exchange m.in. the following indices: WIG20, WIG30, mWIG40, sWIG80, WIG-ESG . In short: WIG20-stock index of the 20 largest joint-stock companies on the WSE, WIG30-similarly 30 largest companies, mWIG40 – 40 largest, sWIG80-80 largest, WIG-ESG-stock index of responsible companies. In addition to the regulated market, WSE also operates NewConnect market , which it is an alternative but structured trading system. NewConnect is an exchange for young, innovative companies, and the investment risk is higher here.

The stock market-like bookmaker betting - it is allowed in Poland only for people who are already adult . In addition, it also applies here tax the so-called Beam tax (19% capital gains tax). However, if this bookmakers they are responsible for the correct calculation and payment of tax to the tax office, so much money that brought us the game on the stock exchange, must be settled independently (PIT-38) until April 30 next year. Let's just add that the Forex market is subject to the same tax and age requirement.

Forex currency market

The foreign exchange market is one of the fundamental parts of the financial market, and it includes all foreign exchange transactions . The key here is the concept exchange rate which expresses the price ratio between the selected currencies and varies depending on the supply and demand for them. We are interested in the extremely popular Forex currency market, which took its name from the English Foreign Exchange . The Forex currency market is in the simplest terms a place on the network where you can trade currencies, making a profit or loss. So if GPW it is a market where stocks, bonds and other securities are traded, while Forex is only a currency exchange market. There are many analogies about what it looks like. playing the stock market and how the currency exchange market works, but there are also a lot of significant differences.

First, let's note that in the Forex market, the investor does not become the owner of a given currency (he does not sell or buy currency), but only earns or loses money on the odds difference . The currency exchange itself includes currencies from around the world, but the most significant are the strongest currencies, i.e. the US dollar (USD), the euro (EUR), the yen (JPY) and the British pound (GBP). Forex currency exchange market is functioning virtual reality that is, all transactions are carried out only through the Internet (Forex does not even have a physical headquarters). The Forex currency market is unregulated market , which means that no exchange supervises the process of currency exchange, and the account can be opened in any country. What is important, the Forex market operates by 24 hours a day on weekdays , which gives investors more opportunities to act (for example, the WSE operates on weekdays, but only from 9 am to 5 pm). Currency purchase/sale orders are also executed much faster (in a few seconds) than transactions on the WSE.

To enter the Forex market and be able to start trading, similarly as required exchange . it is necessary to assume special account and again he takes part in its establishment brokerage house . The Broker, which handles transactions made on the Forex market, also charges them a certain amount of money each time. Commission . The investor should check well whether the brokerage house has the right to operate in Poland. It is worth knowing that if the broker is a Polish Investment Company, it is subject to full supervision by the Financial Supervision Authority (FCA), and if foreign – only limited control of this authority.

How can you earn capital in the Forex market? They are two main ways . According to the first, currency exchange should be carried out in such a way as to acquire currencies whose value will increase in the near future, and get rid of those that will decline. However, you can start by selling the currency and buying it back when its value falls. How do you know how currencies will behave and what actions to take? To do this, you definitely need to monitor and analyze their rates, choose investment strategies and make speculation. However, it should be noted that the currency market Forex is very unstable and the exchange rate can be subject to unexpected and very large fluctuations. The exchange rate can change dramatically, for example, as a result of unforeseen natural disasters, political events or the economic situation of the selected area. Stock Exchange it is certainly a more stable market and therefore the risks taken on it are less.

Another key difference when it comes to investing on the stock market and investing in the Forex market is currency leverage . This mechanism is offered exclusively by the Forex currency market, and it consists in the fact that the investor can engage in transactions much more capital than he has on his account. The stock market does not provide such an opportunity. Let us add at once that legal bookmakers also, they do not offer an analogous option – bookmakers can bet only for the money paid (or bonus funds from the bookmaker). The Forex market is so attractive for many people precisely because it allows you to invest as if on credit, thanks to which you can achieve a much larger profit. Of course, there is another side to this – after all, currency exchange is not always profitable, and loss in this case means the loss of money that we do not have. The risk is also greater.

The stock market, Forex and betting – do they have anything in common?

We already know in general terms what it is like to bet with a bookmaker, play on the stock exchange and invest in the Forex market. All these activities are certainly divided by their subject: betting, stocks, bonds and other securities and currencies-but the differences can be listed much more. However, before we move on to them, let's consider why the Forex currency exchange market, The Stock Exchange and betting shops are compared in general and whether they are right. True, when it comes to investing on the stock exchange and the Forex market, in fact, the associations impose themselves, but the game at the bookmaker (that is, gambling) seems to be quite far from them. So what do they have in common?

Profit and own contribution

The first argument for the similarity of these three activities is that investing in the stock exchange, exchanging currencies on the Forex market and playing at the bookmaker have the same the ultimate goal is financial gain . Of course, betting is also an area of entertainment and many people play at the bookmaker primarily for the boost of sports emotions. However, since this article focuses on capital investment aspects, we will limit our attention to professional gamblers, that is, those who bet on bookmakers to multiply the money they have.

Proponents of the view that the stock market, the Forex market and betting are very similar to each other also emphasize that in each of these areas own contribution is required . However, always investing requires just to have some initial capital, which due to the right moves can be multiplied. In fact, both profit, own contribution, loss and risk are integral elements of the definition of investing, so if we treat betting as an investment, it is difficult to invoke this similarity.

Two basic techniques

Anyone who is interested in the stock market (but also the Forex market) must know the concepts of fundamental and technical analysis. Fundamental analysis it includes monitoring not only the performance of specific companies or events related to them, but also macroeconomic analysis of the stock market, sectoral analysis, etc. Such an advanced analysis is aimed at estimating which shares of companies are worth investing in, because their price should grow, or from which you can expect an attractive dividend. The stock market may also be based on technical analysis , which is limited to a chart of stock price quotes, turnover values, orders placed, etc. This strategy is based on the belief that a stock index provides sufficient clues as to whether a stock price will rise or fall. This technique is much faster and costs less effort, but it is only a short-term analysis of whether it is worth investing in a given stock.

Does the professional game at the bookmaker look similar? To some extent, yes. Typists often conduct advanced sports statistics, type histories, calculate the probability of occurrence of a given event, taking into account a multitude of parameters, etc. Such estimates are very time-consuming and, like the fundamental analysis for the WSE, give more an in-depth view of the analyzed situation . Of course, betting with a bookmaker is not preceded by such in-depth analyses for every player. Some typers approach the game more mathematically and, as in the technical analysis used for the needs of the game on the WSE or on the Forex market, they are guided by ad hoc numerical indicators (courses). The behavior of the odds can say a lot about what types will work, in addition, experienced players often use purely mathematical betting systems.

Intensity

Some also point out that the stock market and the currency exchange market have a similar intensity to the betting industry. However, it is most often about live betting which players often bet very dynamically, just as transactions made on the WSE or on the Forex market are characterized by great dynamics. However, let's not forget that the bookmakers are still preparing a wider offer for pre-race betting , and advanced players it is betting sites of this type indicate as the main object of their interest.

Risk

Whether our area of activity is the Stock Exchange, the Forex currency market or betting platforms, you can make regular profits on them, everywhere there are also spectacular earnings. Unfortunately, the loss is also very often recorded by investors and players – and its size can also be spectacular. You can lose money anywhere, but the risks in different types of investments are not the same. . First of all, remember that the Forex market is extremely volatile and uses the already mentioned currency leverage, so the risk here is particularly high. We will take a closer look at this issue a little later.

Summarizing this part, we can say that the game on the WSE and the Forex market and betting at the bookmaker they have some features in common . This is primarily due to the fact that if each of these actions is treated professionally, it is a type of investment and its effect can be either profit or loss. And so, if we buy bonds on the WSE or exchange currencies on the Forex market, the value of which will increase significantly in a short time, we can earn the same money as when we put an accurate bookmaker Bet. For all these activities, we need capital to enter, Of course, knowledge, specific skills and, most often, patience and perseverance are also necessary. However, are the chances that we will multiply our money and, on the other hand, the risks that we will lose it, just as great?

Where do you make money?

Perhaps all these considerations can be reduced to the question of whether the Stock Exchange, the Forex currency exchange market, and betting bookmakers make similar money. Or rather, whether the chances of earning them are just as great.

Forex Market

The Forex market is presented as a place where you can earn quickly and a lot, and thanks to the leverage mechanism, the money to enter does not have to be large. However, the facts speak for themselves. On the basis of cyclical studies conducted by KNF, Forex market for the vast majority of investors in Poland brings losses . This applies to around 80% of customers, the vast majority of whom are retail investors. The results of 2020 also show worrying trends: the average result of a single client in 2020 deteriorated significantly compared to the result of 2023 – the loss doubled (from -6.354 $ increased to -11.370$).

Why is the Forex market so difficult and the risk of failure so real? Certainly the impact on the surprisingly poor performance of investors has an ordinary lack of knowledge and experience a lot of them. The Forex currency exchange market is a place where large players earn first of all – the so-called. financial sharks which have a powerful capital and staff of people with expert knowledge and can use this to manipulate the behavior of smaller investors. Let's repeat: the exchange of currencies in this market is not regulated by the stock exchange and is characterized by great volatility and liquidity. Knowledge of investment strategies can be of little use in practice, because predicting how the exchange rate of a given currency pair will behave, it often resembles roulette. . In this light r the Currency Index as predictable as pure gambling.

Moreover, you need to remember that on all transactions performed by individual investors, the broker earns. That is why there is so much content on the Internet extolling the Forex market as a place of easy and fast earnings. And for this reason, investors are encouraged to use leverage, that is, to invest money that they do not actually have. Regardless of whether the transaction is a profit or a loss for the investor, broker gains money .

Stock Exchange

For a change WSE brings real profit to a large number of investors in Poland . Data compiled by the specialized newspaper" Parquet " say that in 2020, investors earned more than $ 28 billion on the WSE, while a year earlier this result was more than 4 times lower. It is not enough that in investing on the stock market began to "play" much more people, the money earned by an individual investor amounted to an average of 70 thousand. $ (the result in 2023 was again much weaker and amounted to 29 thousand. $). Of course, the game on the stock exchange brought some investors a loss, but it is estimated to be much lower than the profit (about $3.2 billion).

WSE is definitely a much safer market than Forex because the investment concerns real values they are not as easily manipulated as the currency. Of course, in order to play on the stock market was profitable, it takes a lot of effort and skill. It is necessary to constantly deepen knowledge-analyze the stock index, check WIG20, WIG30, mWIG40, sWIG80 or WIG-ESG and indeed understand how the stock market works. You also need to be patient, be able to keep your cool in crisis situations and be aware that the WSE or another stock exchange is investing, that is, it always carries the risk of losing capital. Of course, you can also deliberately take more risks on the WSE (e.g. by investing in companies on the NewConnect market, which is riskier than the strategy when buying shares or bonds on the main WSE market).

Bookmakers

How does the bookmaker play in this regard? It is said that when it comes to betting, in the end the bookmaker (as well as the broker) profits. After all, bookmakers are companies with huge capital employing many professionals who need to earn money. They make money from the players. Most importantly, the bookies. they make money in the first place on the margin they impose on each bet . Thus, the more bets the bookmaker accepts, the Greater will be his profit, because it results from the turnover made. If rates paid on all the results of a given Bet are evenly Ro$married, the bookmaker receives a profit regardless of the outcome of the meeting. Of course, the payout of winnings depletes his income, but assuming a 10 percent margin, it is precisely 10% of the amount of the sum of bets that constitutes Beech's earnings, and only 90% of this amount is money for (part of) the players. Hence, for example, unjustified changes in the value of odds - bookmakers want to encourage players to bet on a particular event in order to achieve a balance (therefore, the odds often do not reflect the probability of a given outcome).

This does not mean that betting with a bookmaker can not bring regular profits or even very high winnings – especially for experienced players. Bookmaking bets can be accurately typed with quite high efficiency, as long as we have a lot of knowledge of a given sport and we deepen our purely bookmaking skills (for example, skillful betting or choosing techniques such as playing on valuebets or surebets), and we also have mental predispositions. All this together can give a single player an advantage over the bookmaker and work for his individual profit.

This is confirmed by the media information appearing from time to time that the game at the bookmaker brought someone a huge win – tens or hundreds of thousands of dollars can even be won with one coupon and a small rate . However, in this situation it is about the so-called tapes, i.e. accumulative bets where many meetings are held. In this way you can achieve very high rate but the risk that the coupon will be lost is much greater than for single coupons. For example, in 2012, a tape with accurate results of 30 matches and a bet of only $ 2 brought the player a win of $180,000. At the moment (as of September 2021), the Africanm record is a win of more than $ 1,250,000 from 2023. however, to win such money, typer bet a dozen accumulated coupons, the total stake of which was relatively small – exactly $76.

Gambling or investing addiction

Finally, a few words about the issue that is worth touching on, talking about issues such as money, their investment, multiplication or their loss. It's about gambling addiction and a brief reflection on whether investing in WSE or Forex cannot be as addictive as gambling. Gambling addiction is a habit that makes an activity that qualifies as gambling, such as betting at a bookmaker, become the dominant sphere of a person's life. Gambling addiction is a slow-growing disease that, untreated, usually causes the addict to lose everything: Home, Family, work, friends, health, and sometimes freedom or even life. The loss also includes, Of course, all his money and material goods.

Can playing the stock market or Forex market be like gambling, and an unhealthy approach to investing can resemble gambling addiction? Unfortunately, yes. All behavioral dependencies are that we feel compelled to do something, and this also applies to an increasing number of investors . If we lose control over how much time and money we spend on the stock market or Forex market, we feel the so-called hunger to play, then these are already signs of addiction. And just as it happens when it comes to gambling addiction, the addictive game of the stock market begins to harm us and our loved ones, and translates negatively into other areas of our lives. Therefore, whether you gamble for profit or treat gambling as entertainment, but also when you invest in WSE or Forex, keep in mind that gambling or investing addiction can also hit you and pay attention to any disturbing signals.

Summary

Are investing in the stock market, playing Forex and betting with a bookmaker similar? To some extent, for sure. Each of these activities can be a way to invest, each requires specific skills and specialized knowledge, each can be addictive, and each can bring profit or loss. However, the risks involved are not similar. The Stock Exchange is to some extent a safe place, on the other hand, the Forex currency market-extremely unstable and risky. Investing in the Forex market can be compared to playing at a bookmaker, except that it is the brokerage house that accepts bets, and they concern how the exchange rate of a particular currency pair will behave. But most importantly, the player-Investor very often makes decisions about their types based on insufficient data. Betting based on Expert Sports analysis and a thorough player's workshop can therefore prove to be more profitable and less dependent on the case. And who's gambling here?