Trading its Like Gamble??
It's not if you learn to trade properly, and don't cross the dreaded line of not accepting occasional losses - that's when traders start gambling
Everything in life is a gamble - when you look at divorce rates......the worst financial investment a man can make is to get married
Everything in life is a gamble - when you look at divorce rates......the worst financial investment a man can make is to get married
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shakespeare
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My wife and I were happy for 25 years.LeTiss 4pm wrote:Everything in life is a gamble - when you look at divorce rates......the worst financial investment a man can make is to get married
Then we met.
Boom boom!
the man was a genius: https://www.youtube.com/watch?v=9nNGlaiVypU .. https://www.youtube.com/watch?v=nj4coUnMKqIshakespeare wrote:My wife and I were happy for 25 years.LeTiss 4pm wrote:Everything in life is a gamble - when you look at divorce rates......the worst financial investment a man can make is to get married
Then we met.
Boom boom!
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Crazyskier
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Therein lies the key. Discipline and focusing on the goal and NOT allowing in -play if that's not the strategy employed.Euler wrote: if you lose, you shouldn't lose your stake if you are disciplined enough.
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stueytrader
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This is an interesting (and important) question however - I think it depends what you define as a 'gamble'.
If it means any financial effort that involves an element of risk, then yes trading has to be considered a form of gambling. We are 'betting' on the direction/movement of the market prices.
The difference seems to me more the levels of risk, and %s of times we would consider it likely that we would lose specific amounts of our stake.
The fact that a trading day can have a significant number of losing trades/markets means that of course it surely has to be considered something of a form of gambling?
But, I think the key is that it is a very specific subset of gambling, a very specific form of gambling that provides much more safety margin for the trader (or it should do).
If it means any financial effort that involves an element of risk, then yes trading has to be considered a form of gambling. We are 'betting' on the direction/movement of the market prices.
The difference seems to me more the levels of risk, and %s of times we would consider it likely that we would lose specific amounts of our stake.
The fact that a trading day can have a significant number of losing trades/markets means that of course it surely has to be considered something of a form of gambling?
But, I think the key is that it is a very specific subset of gambling, a very specific form of gambling that provides much more safety margin for the trader (or it should do).
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stueytrader
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There have been similar questions in discussions amongst financial traders - i.e. are they gambling, speculating, etc.
In the end the terms used are less important surely than the actual nature and detail of the activity?
Speculation perhaps implies a level of risk (possible loss) in an uncertain environment, which others might call a 'gamble'.
It's a nice thought to think that trading means we leave nothing to chance - but surely that's not really true. It's just perhaps we leave less to chance than what is normally called 'gambling'? I don't like leaving a lot to chance, so would avoid complete gambling, so I view the greater attempt to control my results (trading) as leaving less to chance.
In the end the terms used are less important surely than the actual nature and detail of the activity?
Speculation perhaps implies a level of risk (possible loss) in an uncertain environment, which others might call a 'gamble'.
It's a nice thought to think that trading means we leave nothing to chance - but surely that's not really true. It's just perhaps we leave less to chance than what is normally called 'gambling'? I don't like leaving a lot to chance, so would avoid complete gambling, so I view the greater attempt to control my results (trading) as leaving less to chance.
By definition If you are buying and selling market prices on an exchange then it is trading. Trading has its origins in bartering from ancient times where you buy and sell to make profit. So whether its forex, commodities, football and even horse racing, If you are operating on an exchange then its trading period.
However should you be trading using a method which does not give you a statistical edge (combination of reward:risk ratio and percentage of wins/losses) then it can be perceived to be gambling because you are doing something which simply is going to deplete your money. The same way that people go to the high street betting shops to place bets on prices that the betting shop knows statistically is not in favor of the punter. Or the same way that people get involved in trading forex and dont know what they are doing and then when they lose money revenge trade to try and get back to breakeven only to find they are digging themselves into a massive debt.
There are other things like Poker which is not gambling (for professional poker players) because poke is a game which is based significantly on probabilities where professional traders know how to have an edge over other players. I would call Poker speculating but not gambling.
Just my 2 pennies
However should you be trading using a method which does not give you a statistical edge (combination of reward:risk ratio and percentage of wins/losses) then it can be perceived to be gambling because you are doing something which simply is going to deplete your money. The same way that people go to the high street betting shops to place bets on prices that the betting shop knows statistically is not in favor of the punter. Or the same way that people get involved in trading forex and dont know what they are doing and then when they lose money revenge trade to try and get back to breakeven only to find they are digging themselves into a massive debt.
There are other things like Poker which is not gambling (for professional poker players) because poke is a game which is based significantly on probabilities where professional traders know how to have an edge over other players. I would call Poker speculating but not gambling.
Just my 2 pennies
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Crazyskier
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It's all subjective IMO.
Trading versus gambling versus speculating versus even the poker scenario outlined are all undoubtedly a FORM of gambling, in the sense that you sometimes win and sometimes you LOSE.
It's all semantics and I get tired of hearing how 'skill' and experience and discipline make it a form of investment rather than wagering...
If you are risking real money on an event that you do not fully control, it is indeed a form of gambling or wagering or gaming, irrespective of risk or strategy or likelihood of gain.
Semantics, people.
Trading versus gambling versus speculating versus even the poker scenario outlined are all undoubtedly a FORM of gambling, in the sense that you sometimes win and sometimes you LOSE.
It's all semantics and I get tired of hearing how 'skill' and experience and discipline make it a form of investment rather than wagering...
If you are risking real money on an event that you do not fully control, it is indeed a form of gambling or wagering or gaming, irrespective of risk or strategy or likelihood of gain.
Semantics, people.
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stueytrader
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Yes, I think the key aspect is 'an event you do not fully control'Crazyskier wrote:It's all subjective IMO.
Trading versus gambling versus speculating versus even the poker scenario outlined are all undoubtedly a FORM of gambling, in the sense that you sometimes win and sometimes you LOSE.
It's all semantics and I get tired of hearing how 'skill' and experience and discipline make it a form of investment rather than wagering...
If you are risking real money on an event that you do not fully control, it is indeed a form of gambling or wagering or gaming, irrespective of risk or strategy or likelihood of gain.
Semantics, people.
If we could control all aspects it wouldn't be gambling, speculation or trading, it would simply be printing money...would be nice!
I do still see a distinction in forms of gambling though, and trading is a distinct subset due to the mechanisms and fundamental aims of a trader (as compared to a gambler).
Of course, a trader can get sloppy and slip back into becoming more of a gambler too...
If by your definition you perceive anything which is out of your control to be gambling then if thats your definition then yes all forms of investment, spots trading, games of skill are gambling.
However my definition of gambling comes from proverbs in the Bible which says that he who gambles is a fool as he will waste away his money.
However I know many traders who make 6 figures per year. They are a miniority but they do it because they are seasoned professionals. However I have never come across a wealthy professional gambler who constantly is profitable every month, every year.
Thats why I see a distinction because one ,ethod which is based on strategy can lead to continual profits and the other strategy is one which always leads to ruin.
However my definition of gambling comes from proverbs in the Bible which says that he who gambles is a fool as he will waste away his money.
However I know many traders who make 6 figures per year. They are a miniority but they do it because they are seasoned professionals. However I have never come across a wealthy professional gambler who constantly is profitable every month, every year.
Thats why I see a distinction because one ,ethod which is based on strategy can lead to continual profits and the other strategy is one which always leads to ruin.
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stueytrader
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You make an interesting point, but I don't think that profit or loss distinguishes gambling and trading - there are pure 'position gamblers' who make profits, some professional. On the flipside there are many losing traders in the world (some very heavy losers).lmf21734 wrote:If by your definition you perceive anything which is out of your control to be gambling then if thats your definition then yes all forms of investment, spots trading, games of skill are gambling.
However my definition of gambling comes from proverbs in the Bible which says that he who gambles is a fool as he will waste away his money.
However I know many traders who make 6 figures per year. They are a miniority but they do it because they are seasoned professionals. However I have never come across a wealthy professional gambler who constantly is profitable every month, every year.
Thats why I see a distinction because one ,ethod which is based on strategy can lead to continual profits and the other strategy is one which always leads to ruin.
Being profitable doesn't really define the difference between trading and gambling IMO. If it did then I don't think there would be any gamblers left, everyone would simply trade.
