Articles

The Future of Forex Trading and Video Gaming – When Cables Cross

Gambling is often referred to as gaming since the friendlier name is favoured by the industry to make their business sound more innocent than it is. Online Forex trading and the gambling industry have on many occasions been painted with the same brush, particularly by financial regulators and consumer watchdogs. Many financial services authorities liken Forex and CFD products with online gaming platforms and Binary Options in particular. The similarities are drawn from the potential risks to retail investors and the amount at stake. 

Frankly, comparing fixed-odds gambling to CFDs on the foreign exchange market is grossly misguided. The rules of a fixed-odds betting product dictate that eventually, the player will lose regardless of strategy or technique. In contrast, the Forex market is exactly that, a “market”. FX is decentralised and so vast that no single entity can influence the direction of any currency pair, except for the few most influential institutions on earth. 

In this opinion piece, we’ll explore how video gamers and their communities have a lot in common with Forex traders.

Similarities Between Video Gaming and Forex Trading

To be a successful Forex trader there are many things you need to master, to name a few; technique, risk tolerance, patience and following a strategy. The experience of trading is quite similar to playing a game.

  • In some games, it’s common to lose lives, and when you are trading you’re going to close many unprofitable trades; neither of which means you have lost the game. Just start the round again.
  • In some games, you collect experience (XP) to level up, and when you trade FX, your objective is to grow your account as much as possible.
  • In many games, it’s the newbies that get picked off early. Entering a round with far more experienced players and getting shot in the face moments after spawning is much like a first time trader opening a 1 Lot position with $500 in their account and leveraged 100:1. The difference with making that trade is you won’t be respawning any time soon.
  • Many gamers and trader heavyweights set themselves up with ergonomic workstations, high resolution and multi-screen displays, powerful computers with top of the range graphics cards, processors and plenty of RAM and as much bandwidth as their ISP is willing to offer.

There is a common misconception that day trading or video gaming are solitary activities. Except, there are hundreds and thousands of online communities, platforms and content creators who connect online.

Common Traits of Trading and Gaming Communities and Culture

The video game industry was worth $145 billion in 2019, and the value of this sector is expected to surpass $200 billion by 2023. Currently, there are 2.6 billion video gamers worldwide, 210 million of which are based in North America, which is approximately 36% of the entire population. Meanwhile, there are just 9.6 million retail Forex traders.

The size and scope of the video gaming industry is far greater than the online trading industry. The difference in scale certainly reflects the increased maturity of gamer communities in comparison to FX. However, Forex and CFD trading communities exhibit many similarities in their online gaming counterparts.

Trading Rooms

In a 2016 survey of 1,560 gamers in the US conducted by Statista Research, just 1% of PC gamers said they don’t play online multiplayer games, whereas 7% responded they only play multiplayer games. Collaboration undoubtedly makes some games more fun and exciting. When you approach challenges or opponents as a team, you have more chances to succeed by combining your brainpower and having more eyes on the prize.

The same is true in Forex trading. Many traders join trading rooms to band together to hunt in teams. By approaching the market as a collective, decisions can be made against a greater number of observations, experiences and viewpoints. Each member of the trading room can read charts and interpret them differently. Being able to debate your decisions before you act on them is incredibly helpful. In the same way that a team member in Counter-Strike warns you not to go into a particular room, a member of your trading room can advise you when to get out of a position based on something they experienced in another chart or timeframe.

Not only can you approach the markets with more brain power but also with more techniques. In a First Person Shooter, you might choose different weapons for approaching various situations. As a trading team, you can apply the same logic and assign each other specific roles.

In a video game, you might be playing five against five. But, in the forex market, you’d be playing five-against-everyone. As a trader, the more people on your side, the better.

Troll Boxes & Discord

Many online games where you play in teams and groups of players are distributed across different rooms, maps, or arenas often come with a chatbox for teams to message each other. Many trading platforms pack live chat functionality, and trading pairs distinguish chatrooms as opposed to maps. Thanks to the crypto trading community, the feature became known as a Troll Box. Poloniex, Bitmex, Tradingview and even the Bloomberg terminal allow traders to interact with each other as they trade.

Besides integrated chat features inside games and platforms, the popular Discord platform which was initially built for gaming communities has been coinhabited by Forex traders for many years.

Live Streaming

Just as people who enjoy playing sports also enjoy watching others play live sports, the same is true for gamers and traders. Watching others participate in an activity which you are interested in not just entertaining but also educational. Gamers enjoy watching pro-gamers and traders enjoy watching pro-traders. Despite there being platforms like Twitch for gamers to live stream, most Forex traders use good old YouTube for recording their trading sessions.

Influencer Economies

It’s clear that you can’t directly monetise video gaming, whereas the sole purpose of trading Forex is to generate a return on investment. Contrary to what your parents and teachers told you during childhood, playing video games is not a complete and utter waste of time. 

Gaming lovers have found ways to profit from their passion. Professional gamers can earn from sponsorships and competition prize money. Enthusiasts have launched blogs, vlogs and other types of content to establish themselves as influencers and earn advertising revenues.

Competitions

The video game industry is well recognised for hosting extravagant events and competitions to draw in fans and glorify their advocates who invest thousands of hours in mastering their games. There are high profile competitions for eSports, first-person shooters, role-playing games and action and adventure games. Besides large annual events, game developers also offer in-game contests to motivate players to learn the skills of the game and battle against each other for real prizes.

Forex brokers have taken the same initiative and offer trading competitions, mainly for demo traders. The idea is to encourage traders to learn in a safe environment where they can’t lose any money, but there is still an incentive to pay attention and compete.

Cheat Codes & Signal Services

Have you ever used a cheat code in a game? With the clear exception of Grand Theft Auto, cheating takes away much of the fun from the game you’re playing and means you don’t need to practice or improve your skill to progress. 

Tricksters find ways to exploit games to sell cheats and hacks which may or may not work to gamers looking to quickly gain XP or in-game collectables and other ways to gain an unfair advantage against other players. Likewise, a lot of new traders sign up for Forex signal services to take the hard work and time required to learn the skills needed to trade effectively. It would be appropriate to compare the two.

What is the Future of Forex and Could it Merge with Gaming?

What we have unearthed in this article are several similarities between forex trading and video gaming. Both activities require cooperation with peers, critical and strategic thinking, determination and perseverance when faced with tough competition and willingness to learn the rules of the game without depending on shortcuts.

As trading has so much in common with gaming, it would not be unreasonable to presume the future of Forex trading is headed in a similar direction to gaming. Augmented Reality, which combines the real world and a virtual one. AR is one of the areas where gaming is expected to go.

There are already sophisticated technical analysis tools available to help recognise trends, chart patterns and support and resistance zones. Imagine for a moment that you didn’t have to observe those lines and objects in your trading terminal but could simply sling on a pair of AR goggles. The goggles could virtually overlay indicators without you clicking a single button. That’s just one idea of how Augmented Reality could be incorporated with trading. Considering that once upon a time, the concept of using a personal computer to place your trades was a novelty. Many traders were quite content with picking up the phone and calling their broker.