Is Trading the Same as Gambling?

This is a discussion on Is Trading the Same as Gambling? within the New to Trade2Win forums, part of the Reception category; Dare I suggest that the reason the OP has put so much thought into this question is because society questions ...

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Old Nov 2, 2010, 10:05am   #9
Joined Jan 2009
Re: Is Trading the Same as Gambling?

Dare I suggest that the reason the OP has put so much thought into this question is because society questions trading/investing as an "acceptable" occupation? (There are repeated references to "most people" or "the majority of people", which probably refers to "society")

Let's face it, if you derive most or all of your income from gambling/trading/investing (whatever you want to call it), it can make for a tricky "so, what is it you do?" moment at a party. If you can answer "I'm a doctor" it places you on the moral high ground, whereas "I'm a trader" usually evokes a neutral to negative reaction.

Having said that, the original post is very well thought out and expressed. I also agree that "positive expectancy" differentiates gambling from trading with an edge. I've now gotten to the point that when my (non-trading) friends tell me about stocks they are buying, I think of it as gambling. Their comments are usually along the lines of "I'm long Apple because I have an iPad and it's amazing" which, to me, is simply not a strong enough reason to want to own the stock!

I repeatedly point out that stockmarkets are NOT guaranteed to go up ad infinitum, but such is the culture of equity that no-one is interested. When I point out that the Nikkei is a quarter of its value from 20 years ago, the response is "it's different in the West" or "is that the time? I need to leave".

There is also a strong cult of entrepreneurship in the UK. Starting your own business is always looked upon favourably, but this does not include trading/investing. I approach my trading much as I would a business, namely I keep strict tabs on all movements of cash and expenses incurred, but because I am not producing "something" it somehow doesn't qualify as a real business.

As an aside, I wonder how many small businesses have an edge? Traders think about edge all the time but small entrepreneurs less so, I believe. Because starting your own business is an acceptable activity for society, that is in itself enough of a reason for attempting it, whether or not there is an edge or not. Just a thought..
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Old Nov 2, 2010, 11:37am   #10
 
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Re: Is Trading the Same as Gambling?

Yes and no. Depends on who you ask not a dictionary definition.

Positive expectancy and money management to minimize falling to gambler's ruin some would still consider a gamble, but many a fortune has been based on just such a method.
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Old Nov 2, 2010, 9:03pm   #11
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Re: Is Trading the Same as Gambling?

Quote:
Originally Posted by HowardCohodas View Post
Depends on who you ask not a dictionary definition.
Hi HC,
I think that's putting the cart before the horse, lol!
It doesn't matter who you ask, as all anyone can do is to answer based on their perception of what gambling means to them. Either they're misunderstanding its meaning and/or using the word incorrectly, or its meaning has changed and the dictionary definition no longer reflects common usage and needs to be revised. And the dictionary definition matters because it's not possible to say whether or not trading is gambling (or not) if there isn't common agreement as to what constitutes gambling in the first place.
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Old Dec 22, 2010, 11:04am   #12
Joined Jun 2010
Re: Is Trading the Same as Gambling?

I think it all depends on how you trade.

If you toss a coin and use heads to go long tails to go short or you just start opening silly trades for the sake of it then yes that is gambling.

However if you have a consistent and stratigic approch to trading then i dont think so. Its like playing chess your guarenteed to lose some peices but with good strategy you can win the game
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Old Jan 7, 2011, 12:52pm   #13
 
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Re: Is Trading the Same as Gambling?

Quote:
Originally Posted by timsk View Post
Hi HC,
I think that's putting the cart before the horse, lol!
It doesn't matter who you ask, as all anyone can do is to answer based on their perception of what gambling means to them. Either they're misunderstanding its meaning and/or using the word incorrectly, or its meaning has changed and the dictionary definition no longer reflects common usage and needs to be revised. And the dictionary definition matters because it's not possible to say whether or not trading is gambling (or not) if there isn't common agreement as to what constitutes gambling in the first place.
Tim.
It is important to ask the question to understand where the person who asks it is coming from. Many people view gambling as being a silly activity. Indeed, many on here view gambling on football, horses or poker as being a silly activity. People, largely, do not understand what "gambling" means. If they did, this thread would not exist.
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Last edited by timsk; Jan 7, 2011 at 1:29pm. Reason: Changed 'has' to 'as'
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Old Jan 7, 2011, 1:48pm   #14
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Re: Is Trading the Same as Gambling?

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Originally Posted by T2W Bot View Post
SHORT ANSWER
The very short answer . . .
Maybe yes, maybe no; it very much depends on your definition of gambling and whether or not you have an 'edge'.
I think that you have to call a spade a spade.

There is no "maybe" about it, mate. The answer is yes.

I thought that it was not, but it is. No-one is capable of telling which way the market is going to move. It is random. If it is not random, it's worse. It's rigged by big money.

The only way to win is to control losses until a winner comes along and to work on probabilities. That is where the skill comes into it. So much has been written, over the years, that it cannot be anything else.

As you can see by this thread, I haven't had a good morning.

Last edited by timsk; Jan 7, 2011 at 3:04pm. Reason: Added T2W Bot quote
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Old Jan 9, 2011, 12:41am   #15
Joined Feb 2009
Re: Is Trading the Same as Gambling?

nope trading the market takes skill and most important true disicipilne.The failure rate is incredible high because it's a tough business.

There is a word for it it is called speculation where you use a strategy to take high propablity trades.Gambling is way more fun than sitting in front of your screen for hours carefully choosing your trades using indicators based on math.Consider a sucessfull trader that let's say for example sake has a winning rate of 80%.

That means all things being equal you can say that everytime he enter a trade he has a 80% chance of making money.I think your odds with gambling should be about 50/50.

There is no game of chance that even slighty resembles trading.So my opion it is not gambling it is speculation and we are speculators.

I know my english is terrible but it is my third language
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Old Jan 9, 2011, 12:47pm   #16
 
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Re: Is Trading the Same as Gambling?

*sigh*

It is down to your definition of gambling which is clearly different to the official definition of gambling.
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