And the difference between Gambling and Trading is...

[EyePeaSea]

I'd be interested in people's opinions on this. I just came across an interesting quote from an Economist, Justin Wolfers:

Conceptually, to an economist, there's not a difference between betting and trading — apart from the fact that one sounds more polite than the other

For betting, I read Gambling...

Before posting this, I searched the forums and (IMO) 2 or 3 people were suggesting that it was about 'skill' and 'control' (needed for trading rather than gambling) that was the difference.

Not looking to start a flame-war. For me - both are just 'words' and neither are derogatory.

One could stretch things a bit. Anything where the outcome isn't certain, carries risk. So, could be defined as a gamble. That covers most things from setting up your own business, to buying a house or trading/gambling on an exchange.

Getting correctly on both sides of a trade removes risk, but there is always a point in time when you don't have both sides covered, so there has been a risk.

It strikes me that most people shy away from the G word because they don't want to compare their hard work with some unemployed yob who bets on Dainty Dorris in the 15:40 because that was his nickname for his last girlfriend... (and that definately includes me )

[JollyGreen]

I always use the quote "there's more than one way to dig for gold"

Gambling is harder overall because you need the correct outcome. The internet helps with information but it also brings more parties to the table and they all want a piece of the same pie. If performed correctly then gambling can pay but as you mentioned too may "punters" want the easy route to riches, the one that requires the least amount of effort.

In trading you can be wrong and then cut out for a relatively small loss. When you are right you must take as much profit as possible.

I suppose they are both gambling and having done both I can say they both have their merits.

Another of my favourite sayings

"A person who risks nothing, has nothing and is nothing. Only a person who risks is free."

The full quote is

“The person who risks nothing, does nothing, has nothing, is nothing, and becomes nothing.

He may avoid suffering and sorrow, but he simply cannot learn, feel, change, grow or love.

Chained by his certitude, he is a slave; he has forfeited his freedom.

Only the person who risks is truly free.”

[burdo77]

I've read numerous articles suggesting that most people bet due to their emotion I.e backing their favourite team.

So theoretically the odds do not reflect the true odds but rather are determined by nothing but a hunch.

Trading exposes gamblers, people betting by pure emotion.

[LeTiss]

When you see how many people are killed in road accidents each year, you could say it's a gamble to get behind the wheel. However, if you're a good driver, drive sensibly, concentrate, be patient, don't get angry by the actions of others, and are not under the influence of alcohol - you have a great chance of avoiding something horrible

I would suggest the difference between gambling and trading is not too different

[EyePeaSea]

I really like the full quote JG, thank you. And it's a very apt reminder for everyone at the start of a new year

And I think maybe a possible consensus is emerging. Perhaps the difference is dedication, drive, commitment, perseverance and work versus hunches and emotion?

Thanks everyone

Ian

[marko236]

I class trading as gambling but it is easier to make money trading than doing a normal bet.

[JollyGreen]

IMHO you can make money from both and as mentioned it just takes hard work.

I would add that trading is probably safer, I don't want to use the word easier because that could be seen as annoying to some new/novice traders and I am not trying to upset anyone.

I have experience of gambling and trading so I will offer my point of view on both. In gambling you need a good knowledge of everything related to horse racing, form, going, distance, handicap mark etc, the list is a long one. Gambling is more stressful, or at least it was for me. You can be up one minute and down the next and you can lose through a freak incident. I gave a BTL as part of my recent project on a horse called Unaro. He was travelling the best of the front 3 and was just coming to win the race when he clipped the heels of another horse, slipped up and dumped the jockey on the deck!

In trading you need no knowledge of racing, you need only to understand the markets and how they move. I am not saying this is easy because it is not but it is something you can learn.

I get asked to help people with their knowledge of horse racing but it would take me an eternity. I spent some 40 years watching and studying the subject so trying to distil that knowledge into a short period is almost impossible.

So both can work but like anything in life you only get out what you put in.

[PeterLe]

“The person who risks nothing, does nothing, has nothing, is nothing, and becomes nothing.

He may avoid suffering and sorrow, but he simply cannot learn, feel, change, grow or love.

Chained by his certitude, he is a slave; he has forfeited his freedom.

Only the person who risks is truly free.”

Thats a cracking quote Dave. If there's one thing Ive tried to instil in my kids is that the only failure in life is not trying, so have a go anyway. You're only on this earth once

[oscar123]

Trading is just gambling on price movements, its still gambling.

Trading is no safer than gambling, a bad trader will still lose money, just not as quickly as a bad gambler.

The main difference is when winning. A winning trader will probably have fairly consistent results, winning on most days obviously with the odd losing and a few break even days here and there.

A gambler on the other hand will see huge swings in his results and will experience lots of losing days, weeks, some months and maybe even years.Though in good times will also be able to boast huge winning weeks, it would not be uncommon for a gambler to make most of his yearly profits in just a few good weeks where everything seems to go right.

Both disciplines require a lot of effort and work, neither is easier than the other in my opinion. The main difference though is psychologically, i think psychologically it is easier to be a trader than a gambler, due to the inevitable long losing runs that come with gambling.

A trader can build his bank steadily, a gambler spends the majority of his time with less money than he had the day before, constantly chasing that last peak until a good set of results come in and he hits new highs.

[Tobedotty]

They're the same thing though? Trading is gambling in a different guise, instead of betting on the drop of a ball as in roulette or the number of goals in that exciting Iranian 2nd league fixture, you're betting on the odds moving in a certain direction.

I guess if you're explaining it to people, saying you're "trading" is less likely to conjure up images of the poor house so from that angle its probably a good idea to say you're not gambling. It doesn't really matter what you call it though its really all the same jumble. I like to think that insurance companies are just bookies with white collars.

[gazuty]

JGs quote reminds me of the parable of the talents.

But his lord answered him, "You wicked and slothful servant. You knew that I reap where I didn't sow, and gather where I didn't scatter. You ought therefore to have deposited my money with the bankers, and at my coming I should have received back my own with interest. Take away therefore the talent from him, and give it to him who has the ten talents. For to everyone who has will be given, and he will have abundance, but from him who doesn't have, even that which he has will be taken away. Throw out the unprofitable servant into the outer darkness, where there will be weeping and gnashing of teeth.

[Zenyatta]

Gambling is harder overall because you need the correct outcome.

Trading can, I suppose, be interpreted as a low-level form of gambling, but I think they are two different skill-sets. On the one hand, gambling aims to, as you say, predict the right outcome. Trading is more about finding deviations from a base-line and trying correct inefficiencies.

What I don't like about trading is the constant mickey-mouse skulduggery that seems to go on in all the low-grade UK races. Anyone with half a brain can see its manipulation, because you only need to compare to the Aussie races to see the difference is like night and day...on the UK races I am constantly assaulted by people trying to rope me into games of 'Paper/Rock/Scissors' (constant price spikes, people constantly attacking my position whenever I put big stakes on, constant spoofing, constant enormous price shifts for no apparent reason etc.). And it's working for the manipulators...they've fleeced me (and I'm sure many others) out of thousands.

Trading is often very time-consuming and stressful in my experience, and not as much fun as gambling. At least with gambling you can set-it-and-forget it (it doesn't take much time or energy) and you will get a quick decisive result.

The disadvantage of gambling is the wild swings in fortune, which can be very frustrating. I think for gambling, you really need to take multiple runners to make it pay and smooth out the fluctuations, either dutching (multiple back bets) or booking (multiple lay bets).

I think that if you're gambling, laying is generally much better than backing, because you can put more money on with short-priced lays, and because the back bets just don't come in often enough.

[Groovyelms]

to me gambling and trading are totally different..

A gamble is placeing a bet on a fixed outcome you cannot change, once committed...

A trade is placeing a bet (taking a position) on an outcome that is not fixed ie you can alter your original view.

The gambler jumps for joy when "Surething brings home the bacon" fired up with emotion, drinks all round..type of reaction.

The trader calmly accepts and hopefully prospers.

my twopence worth anyway

Groovy

[LinusP]

I agree that trading and gambling are different but most of my in-play automation strategies involving backing some horses based purely on numbers without closing the trade as I found laying to be unprofitable.

Does this mean I am gambling or trading?

[Euler]

Just saw a Betfair bingo advert on TV, now there is a true gambling medium.