FAQ Is Trading the Same as Gambling?

people ask me in my world what is trading vs gambling ?

well its this..the green line is the usd index based on my own indicator/calcs .........only trade usd pairs when you see a bias on the usd itself ........otherwise you are gambling......and losing !! :smart:

N

i would only consider it gambling if the odds are 50/50 or less.
I try to get an edge with good news feeds from social media, indicators, chart patterns, etc. certain types of trading might be considered more towards the gambling spectrum. On the other hand, there are poker players that make a good living. Probably more the exception that the rule though.

smokealarm said:

i dont think so trading is gambling both are different things

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Totaly agree !

smokealarm said:

i dont think so trading is gambling both are different things

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trading is when you win..........gambling is when you lose

N

Which of these kids is the gambler?

1. Leaves high school and goes to university for 4 years.

For 98% of these kids, they will get a degree in a subject which 2 years later will be unrelated to the role for which they are currently employed, if they are employed at all, and for which he/she probably didn't need any degree at all to secure. He/she will have significant student debt into their mid to late thirties.

Less than 10% of the 2% not in the above set (so that's less than 0.2% of all graduates) will have a high-paying job in a career related to their area of study and will have paid all their student debt off before they are 30.

2. The kid who leaves high school and goes straight into a trade/profession. No student debt. A 4 year work and life experience lead on the graduate cohort and 4 years of earnings that the majority of grads will have to wait until they are more than 10 years into their careers to have caught up on cumulative earnings.

Which of these two entrepreneurs is a gambler?

1. Opens a restaurant.

2. Trades the financial markets.

Stats:
Over 50% of restaurants close within 2 years of opening. 72% within 3 years. 89% within 10 years. Failure within the first 3 years typically results in losses exceeding assets i.e. bankruptcy.

98% of retail traders lose some or all of their capital before dropping out.

I have been involved with a lot of businesses over the years and earlier this year I looked at over 200 ideas for a local uk authority looking to become a VC with some of their money ....very interesting process.......

I think that anyone who is considering a business idea (trading or otherwise)........should watch at least 2-3 series of the many dragon dens / shark tank style programmes when VC's assess business ideas and question entrepreneurs

most people have no idea about their own abilities / strengths/weaknesses ......before they even think about the business ideas they have ............which 99 out of 100 times are littered with flaws

to ensure you are not gambling I would advocate

1) know yourself - inside out
2) know your team (if you need one)
3) know your business area / idea - stress test it ....share it with doubters....open it up.....challenge it to the max
4) adapt adapt adapt the idea - until you have it faring better and better when under scrutiny
5) launch when ready .......re the budgets.....double the forecast costs , halve the forecast revenues......ensure you have capital to fund this period...... and adapt as you go

and so on .................opening a restaurant , new products in online business , fixing fences , selling jewellery , starting a hedge fund , wannabee trader , taxi driver , P2P fund , selling property.....etc etc etc

ITS ALL THE SAME APPROACH NEEDED

N

as an aside - I like the strategyzer guys and have used a lot of their stuff in my own work.........

NVP said:

trading is when you win..........gambling is when you lose

N

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Well said! When i lose money my mom says, "its gambling..!" :cheesy:

No. Gambling can be fun.

Waiting for a flight out at the moment. I could either head back home and take the remaining 3 days of me holiday that was cut short or head straight out to where I should have gone after me holiday had I been allowed to finish it. I've already made me decision of course, but, given the nature of this thread - what do you do? How do you choose? A trader will handle it one way, and only one way and a gambler will handle it another. What will be the difference in the way these two handle it?

Trading IS gambling

Since I´ve read a book called Think, Act, and Invest Like Warren Buffett I think, that trading IS like gambling..
There´s quite a clear explanation of why... tiny book but worthy to check it out.

And one more good resouce here..

As per the definition of "gamble" the reality would be that trading is indeed a gamble. On the other hand, so is walking down the street. Essentially, not knowing the outcome of a certain action or event with 100% certainty makes the activity a gamble.
You will constantly see the comparison of roulette with trading, although both are forms of gambling, they aren't nearly the same. I affirm that they aren't the same, not because of the type of game, but because of how the outcomes are decided.
In roulette, in shape or form can you take an "educated" guess as to what specific number,color, or groups of numbers will play.Compared to forex, in which you could take random positions (such as longing once the price has dropped 100 pips in 30 seconds) or take positions based on formations makes comparing trading to roulette a null argument. Forex has tendencies, as in forex, the market trades within a loop prior to breakouts occurring, COMPARED to roulette having 0 tendencies.

u don't need to learn how to gamble unless u want to cheat trading is the knowledge and the strategy first of all

I mean, it can be and it might not be.

There's gambling - roulette and chance.
There's gambling - poker and skill.

There's trading - picking a stock on hope.
There's trading - long term investment.

Of course it is not... it is what you make of it.

for my understanding NO, gambling use strict casino rules, the game itself never changes, gambler can change his strategy to bet, on the other side forex market changes daily, also there such more options to change the tradingstyle.

Of course not...., in simple terms, you gamble when you make a bet over the result of events over which you dont have any real certainty, you might have a hunch but that is not a certainty of any kind, if you probably studied all statistics involved you can probably increase your winning chances, but what if the pitcher is changed at the first inning?, or the core back is injured, and forced to leave the game?, all your statistics will be crap, and you will still have a 50 - 50 chance. Trading is different because in spite of the uncertainty which blur the markets, you work first in the development of a trading metod that trigger your entrance and exit signals at the most probable points to make a profit, you dont deal 50 - 50 unless you have no idea of what you´re doing...., in a bet your chances will always be 50 - 50, and with that outcome you´re mathematically dead...

i think i would say that it is another kind of gambling . it has its addiction .

If you have an edge, it's not gambling.

Poker is not really considered gambling. It is a game of skill and odds. Likewise, counting cards at Blackjack is not considered gambling but a game of skill and odds. Great trading can be likened to these. Great traders place calculated bets when the odds are overwhelmingly in their favor. However it is very, very, very easy to straight up gamble in the market. Most traders gamble. And most traders who gamble do not even realize they are gambling. So the answer to the question is 'not technically' but 'yes for most unfortunately'.

There is no simple answer.

However having dabbled in sports betting and casino "schemes" I would suggest that trading if you know what you are doing is not as much as a gamble as other casino and bookmaker related options.

Some of the richest men in the world have came from trading stocks and Forex. You cannot say the same about casino gamblers, not when we're talking about billionaires.

It becomes more feasible when you get to a stage that you are eliminating the gambling part as much as possible and are more accurate with your trading. However there will always remain a gamble as it is not risk free.

Every business is a gamble if it were risk free it would not be gamble but the reality is the majority of businesses and inventions are a gamble, as mentioned the object is to take the gambling out as much as you can then it becomes a worthy gamble.