Hi
For the persons on this forum who insists that all forms of trading and speculating is gambling regardless of whether one has an edge, scientific probabilities in their favor because ultimately you are making a prediction on something that you have no control over, then to be consistent would you agree then that your logic means that most things in life are gamble
1 You get married but have no idea as to whether the marriage will last
2 You apply for a promotion at work but have no idea whether you will get the promotion
3 You decide to drive to the supermarket but have no idea whether you will be involved in a car accident or not
According to your logic everything where there is no 100% certainity is gambling.
I beg to differ
1. You get married but have had a great friendship with the wife before and believe in communication and integrity and a willigness to see it through gives you a better probability of success than someone who doesnt believe in communication or intergrity or has a willingness to see it through
2. You apply for a promotion at work and have done your homework about the new position plus have invested in excelling in your existing position. You have studied interview techniques etc
3. In driving the car you abide by the speed limits, you are focused on driving instead of letting your mind wander.
Bottom line if you prepare the best you can then you cannot guarantee a positive outcome but you sure as hell put your self in a better probabalistic positive expectation outcome scenario.
Clearly those that prepare are not gambling with their future and those in the opposite camp are gambling with their future.
So this brings me back to my point that those who study trading and finally understand the concept of probabilities and have the discipline to let their edge work out over a series of trades are not gambling.
I talk from experience. How can I be each week earning anything from £2500 - £4500 with a bank of £10,000 where I am committing to no more than 3% per trade with strategies and taking losses no greater than 6% day, with a profit to loss ration of 1:1 and with a strike rate per week averaging 70% averaging around 20 trades per week.
What is the difference between me this year as opposed to the previous 5 years where I was losing, blown up my account 4 times and where I couldnt accept losses and was guilty of some of the worst revenge trades possible and where I would places trades based on gut feel or the emotion of something happening in a game causing me to make a trade whhich has no justifiable positive expectanccy.
The difference is that in the former trading life I was gambling and in my positive present trading life I have built a foundation of trading based on statistics, probabilities, risk management and emotional discipline.
Now if you want to lump my 2 stages into the same boat and say its all gambling then thats your opinion.
But I know what gambling feels like and I know what trading feels like and boy is there a big difference in terms of results, and bank balance.
The underlining key for me in all this was boiling my edge into a probabilistic percentage. This then becomes my foundation of comfort because I know most weeks and all months it will be in favor of my 70% edge.
How is an edge built. On lots of back testing of a large sample of data to see the trend or pattern. The advantage we have as sports traders is that the rules of sport in most cases are constant so a real edge will always repeat unlike the financial markets where an edge could disappear over time because of changing market conditions i.e. is it a bull or bear market
There is a passage in Proverbs which says he who is a gambler is a fool because he is someone who wastes away his possessions (or something like that).
To me if you have a scientific proven edge and have the risk management and emotional discipline to see the strategy through every day, every week, every month and not deviate which leads to more profit than loss then are you still a fool?
Trading and Gambling - 2 Separate Processes
All we do in life is bending the probability of the events that we need in our favor. but nothing is 100% certain.
Trading is sophisticated gambling that goes one dimension deeper. This is where wins and losses disappear. What matters is being on the right side of probability of the price movement most of the time. And that's a gamble in itself.
And I think that every successful trader was a gambler at the beginning. Somehow loosing money is more associated with gambling and making money with trading.
Trading is sophisticated gambling that goes one dimension deeper. This is where wins and losses disappear. What matters is being on the right side of probability of the price movement most of the time. And that's a gamble in itself.
And I think that every successful trader was a gambler at the beginning. Somehow loosing money is more associated with gambling and making money with trading.
Nice post lmf, I think your observation on how what you are doing now (trading) feels completely different to what you were doing (gambling) makes total sense to me. As you say when you have the stats to give you confidence in the reliability of your edge then you can trade in a far more relaxed fashion. Knowing that even if you suffer a run of losses, over the long term things will even out and your edge will establish itself once again.
Its interesting that you had several years of losses before you finally found your way as it were. This seems to be a very common theme amongst successful traders, very few get it straight from the off. Even people that pay for courses, mentoring programmes and learning materials etc. either never get anywhere or take a long time to do so.
Its interesting that you had several years of losses before you finally found your way as it were. This seems to be a very common theme amongst successful traders, very few get it straight from the off. Even people that pay for courses, mentoring programmes and learning materials etc. either never get anywhere or take a long time to do so.
i'll be honest, what has taken me a LONG time to discover is that i'm pretty useless on the horse markets. i thought i wasn't too bad but then seasonality came into play in november and i was knocked back a few steps. on the other hand, i've discovered that the football markets work for me, possibly because i actually have an interest in them and also potentially because i'm able to selectively pick 4-5 games a day out of the 100's, that work for my strategies.
what i discovered in the horse markets is that there always felt (for me) to be an element of doubt that my selections were going to green up as required. in the football arena, i find that i have a greater number of exits, should the plan fail to meet expectations. this is where i feel i'm trading, rather than taking a gamble.
what i discovered in the horse markets is that there always felt (for me) to be an element of doubt that my selections were going to green up as required. in the football arena, i find that i have a greater number of exits, should the plan fail to meet expectations. this is where i feel i'm trading, rather than taking a gamble.
I think I have seen Letiss post about trading markets that you have an interest in, and know something about, this makes good sense. Having said that though, I read Adam Heathcotes blog a while back and he knew absolutely nothing about horse racing he would just trade the numbers.jimibt wrote:i'll be honest, what has taken me a LONG time to discover is that i'm pretty useless on the horse markets. i thought i wasn't too bad but then seasonality came into play in november and i was knocked back a few steps. on the other hand, i've discovered that the football markets work for me, possibly because i actually have an interest in them and also potentially because i'm able to selectively pick 4-5 games a day out of the 100's, that work for my strategies.
what i discovered in the horse markets is that there always felt (for me) to be an element of doubt that my selections were going to green up as required. in the football arena, i find that i have a greater number of exits, should the plan fail to meet expectations. this is where i feel i'm trading, rather than taking a gamble.
I suppose the thing to do it to try and find something your good at and stick with that, it sounds like you have found your niche with football and I hope you continue to do well with it.
i think it helps, but also i completely agree about just using the numbers as this is exactly the approach i take with both event types. however, given the number of parallel options in the football markets (and i know there are the place markets in horse racing to cover some bases too) i just feel that i can almost create a flow chart (in my mind) to cater for the outcome changing in real time and proactively be ready for it - maybe my imagination is too limited when it comes to the nags!!Bluesky wrote: I think I have seen Letiss post about trading markets that you have an interest in, and know something about, this makes good sense. Having said that though, I read Adam Heathcotes blog a while back and he knew absolutely nothing about horse racing he would just trade the numbers.
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spreadbetting
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lmf21734 wrote:
The difference is that in the former trading life I was gambling and in my positive present trading life I have built a foundation of trading based on statistics, probabilities, risk management and emotional discipline.
Not sure why you considered yourself to be a gambler when things went wrong but a trader now it seems to be working for you. From what you're saying you were obviously using trading techniques of closing bets rather than straight punts.
You seem to have negative connotations of gambling whereas the only difference is a trader is gambling on a price moving in his direction with the intention to close out, anyone betting on Betfair long enough knows closing that bet isn't guaranteed. Traders and gamblers will live or die depending on how good they are at getting 'value' on their bets, the succesful gamblers I've met have all put in a hell of a lot more effort on their selections than I've done in my 15 or so years on Betfair.
At the end of the day they'll always be lazy 'gamblers' and lazy 'traders' who'll lose because they can't be bothered to put in the groundwork or effort not because one trades and the other gambles.