I am relatively new to the trading game but have been gambling (not very well) for many years.
Obviously, there is an element of gambling in all trading but I am sure many traders will tell you that trading is limiting the risk of gambling. My question is "where is the line drawn"?
For example, I select horses that I think are unlikely to win the race and place a lay bet. I then look to trade out with a back bet at a higher price. If I don't get it before the off I am reluctant to trade at a potential loss on the basis that I have already decided it is not going to win the race. I am now gambling. If I look for the higher price in-play, am I gambling or trading.
I am sure there are many more examples, but I would like to hear your thoughts.
When does trading become gambling and vice-versa?
Trading is speculation which you could argue is also gambling.
But you cant do advanced strategies like 'trading' if you are taking the outright risk of traditional gambling IMHO. If you take open ended risk you are outright gambling and that doesn't sit well with the low returns from speculating on price movements. It takes a lot of small gains to get back one big loss.
Speculation / Gambling / Trading is not investment and never will be so the line between that is a lot clearer. If anybody ever uses the word investing in a gambling market, run a mile!
But you cant do advanced strategies like 'trading' if you are taking the outright risk of traditional gambling IMHO. If you take open ended risk you are outright gambling and that doesn't sit well with the low returns from speculating on price movements. It takes a lot of small gains to get back one big loss.
Speculation / Gambling / Trading is not investment and never will be so the line between that is a lot clearer. If anybody ever uses the word investing in a gambling market, run a mile!
Not sure, I agree with this semantics. What is the difference of investing your money into a hedge fund where someone else gambles for you in the FX markets and you yourself being the guy who does this? Unless you mean that also hedge fund speculation has nothing to do with investment since it doesn't channel money into productive economic usage....Euler wrote:If anybody ever uses the word investing in a gambling market, run a mile!
In one paragraph you have summarised why the financial system nearly collapsed in 2008. Buffett was warning about this when I was in Omaha in 2004 but nobody took a blind bit of notice. As long as people are making money it seems very few actually think about the true implications of what they are doing. The last article I wrote for shares magazine in late 2007 was about the banking system and how I wouldn't invest in it because of the crazy stuff going on. Probably the best article I ever wrote! I'm a good old fashioned investor.
People need to stop moaning about cuts and the like and get on with re-building the economy. Other more fortunate economies are laughing at the mess the west has got itself into and the fact that the response is to get into more debt / go on strike.
People need to stop moaning about cuts and the like and get on with re-building the economy. Other more fortunate economies are laughing at the mess the west has got itself into and the fact that the response is to get into more debt / go on strike.
. The whole notion of "investing" for gambling and of "putting your money to work" as an euphemism also make my stomache revolt ...-
superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
I used to work with a guy who was vehemently anti-gambling (he wouldn't even join in the Grand National sweepstake), but he had loads of stock market "investments" and saw no contradiction.
"gambling" has connotations of recklessness, but it's all just perception.
"gambling" has connotations of recklessness, but it's all just perception.
I think many people also fail to realise that inaction can be just as risky as action (although failure by inaction hurts less, as you can blame factors beyond your control!). Some people want to wrap themselves in cotton wool and avoid risk, but the certainty they seek is an illusion!
Jeff
Jeff
freddy wrote:Yeah there are alot of narrow minded people like that around, every thing is a gamble to some extent but some people just can not get there heads around it
The most common mistake I have seen is people turning a trade into an outright gamble. Something doesn't match or there are a slight loss, they wait for that to resolve but it gets larger. Sometimesm, rather than cutting out, it goes in play and then you are in the lap of the gods.
The key is to have a clearly define exit and to accept losses, no matter how large. Painful but necessary.
The key is to have a clearly define exit and to accept losses, no matter how large. Painful but necessary.
-
JollyGreen
- Posts: 2047
- Joined: Sat Mar 21, 2009 10:06 am
I agree with just taking it on the chin and moving on. I have sat with friends showing them trading and if they lose £10 they immediately want to get it back. I keep telling them not to bother because it's gone and they should move on. They keep saying "back this favourite and you'll get it back".....I just play deaf and look at the next market.