Trading... gambling!

This is a discussion on Trading... gambling! within the Psychology, Risk & Money Management forums, part of the Methods category; Don't get mad... just a thread What is the real difference between gambling and trading, or speculation? We have terribly ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Dec 14, 2002, 12:28pm   #1
BeM
 
BeM's Avatar
Joined Jul 2002
Trading... gambling!

Don't get mad... just a thread
What is the real difference between gambling and trading, or speculation?
We have terribly rich people in both cases, however speculators, including trader and investors alike, are much richer. You must agree with me that even prosperous investors are concerned with the psychology of the whole market, which is a speculative approach.
What are the real differences and similarities as you think?
__________________
Ben
BeM is offline   Reply With Quote
Old Dec 14, 2002, 1:56pm   #2
 
FTSE Beater's Avatar
Joined Feb 2002
To quote a wise man (well me )
Quote:
The difference between Gambling and Trading/Speculating is that Gamblers do not know what they’re doing. Someone who makes money backing horses is not a gambler, just a speculator based on the knowledge that they have acquired over time.
It’s the same in trading, a gambler will blindly throw money at a share where as a trader/speculator will use his knowledge to gain the best possible risk/reward ration.
I still stick to this and probably always will.
FTSE Beater is offline   Reply With Quote
Old Dec 14, 2002, 2:46pm   #3
 
Helenqu's Avatar
Joined Dec 2001
Hi BeM,

I can't recall the number of spats we've had on TMF over this!! My tack on it is that it depends on the gambling.
Roulette/lottery - a game of chance hence gambling
Poker/Backgammon - games of skill/strategy and more like trading. To me it's about a need for skill. In gambling you don't need to have any skills.
__________________
Helen
Helenqu is offline   Reply With Quote
Old Dec 14, 2002, 3:55pm   #4
 
dsmodi's Avatar
Joined Mar 2001
Gambling: It is either impossible or extremely hard to stack the odds in your favour. Therefore winning is based almost entirely on luck.

Bad Trading: See Gambling (>90%+ of traders do this).

Good Trading: Done in the appropriate pschological manner which is backed up with good money management skills and educated entries into trades thereby making every effort to stack the odds in ones favour to ensure a win. (<10%- of traders do this).

Oh well, it's all very easy to write this, but alas I am still a gambler...
dsmodi is offline   Reply With Quote
Old Dec 14, 2002, 4:28pm   #5
Riz
Joined Nov 2000
lol

How about something in between gambling and business which can easily switch to gambling once you lose discipline, self-conrol, etc and get too emotional...

Riz
Riz is offline   Reply With Quote
Old Dec 14, 2002, 5:32pm   #6
 
Skimbleshanks's Avatar
Joined Nov 2000
It's very easy for people who don't understand trading to believe it is just gambling. It is because they are ignorant about how you protect your risk (if you are trading properly, that is).
Skimbleshanks is offline   Reply With Quote
Old Dec 14, 2002, 6:41pm   #7
 
Mr. Charts's Avatar
Joined Sep 2001
Skim is precisely correct.
Trading is about understanding probability based on previous experience, knowledge and extensive research - and testing those concepts live over a sufficient period of time to develop statistically significant results.
Although unforeseeable events will by their nature introduce apparently random changes, your trading model and pattern must allow for those.
This approach is much closer to making a conscious decision to risk flying, driving, crossing a road carefully, planning and running a business etc., and no-one would call those activities gambling. Only those unaware of how to trade in a controlled and consistently successful way would call it gambling.
My family know how I earn our living and support me to the hilt, as do our non-trader friends.
We have an old family friend who is about to retire as a stockbroker and I am teaching him how to trade the US markets.
He knows from seeing my own trading records that he is going to do very well trading my way - in fact he should do better!
Is he a gambler?
Trading is a business, run it as such.
There is no shame in being successful.
By the way, I must be one of the few people to have visited Las Vegas and not gambled a cent.
__________________
Mr. Charts
Full time US Share Trader
Follow me on Twitter twitter.com/MrChartsJoyson

Contributor to T2W's Trading FAQ Book
http://www.trade2win.com/books/trading-faqs

T2W interview

http://www.trade2win.com/knowledge/a...ichard-joyson/
Mr. Charts is offline Coach/Trainer   Reply With Quote
Old Dec 14, 2002, 7:35pm   #8
BeM
 
BeM's Avatar
Joined Jul 2002
BeM started this thread Thanks for the thoughts!
I believe the major difference between gambling and doing any other type of business, as commonly understood, is that when you gamble you purely depend upon luck. However there is risk in anything, no matter trading or any other type of business, and as far as one does not take into consideration other factors aside pure randomness, then he/she is gambling, no matter the business which involves any financial investment.
I see some common features both successful traders and gamblers have, and that is although they are conscious of the randomness, they do not rely upon it.
__________________
Ben
BeM is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
How to prevent trading turning into gambling... rav700 Psychology, Risk & Money Management 83 May 30, 2007 2:00pm
How to prevent trading turning into pathological gambling nine Psychology, Risk & Money Management 3 May 21, 2007 1:39am
How about Gambling for a living Henry Fixed Odds 62 Jan 2, 2006 1:22pm
Professional gambling... Col_Stiffler Spread Betting & CFDs 14 Feb 7, 2004 12:35am
Gambling? suggy First Steps 22 Jun 16, 2003 10:11am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)