FAQ Is Trading the Same as Gambling?

[awllee]

I think only if you're honest with yourself, you can answer this.....

In my mind, if you've done your analysis and ensured that you're opening a trade within your parameters then you're not gambling.. however, this doesn't mean that the trade will be profitable.. it also doesn't mean that your trading system is profitable even if all your trades are not gambles.

And you can have a hunch that a market will move in a certain direction and place a trade, then that is definitely a gamble.. even if it makes you money.

A successful trader is one that is trading... all others are gamblers....

 

[alan5616]

I think only if you're honest with yourself, you can answer this.....

In my mind, if you've done your analysis and ensured that you're opening a trade within your parameters then you're not gambling.. however, this doesn't mean that the trade will be profitable.. it also doesn't mean that your trading system is profitable even if all your trades are not gambles.

And you can have a hunch that a market will move in a certain direction and place a trade, then that is definitely a gamble.. even if it makes you money.

A successful trader is one that is trading... all others are gamblers....

All trading, where you do not own the underlying instrument, is gambling. The forex market is the best example of this.

 

[alan5616]

Are you kidding? of course it isn't, gambling games are just for fun for majority of people

What, in your opinion, are trades that guarantee you won't lose money?

 

[Trader H.C.]

It really depends on the trader.

Some people trade like they are gambling, while others trade it systematically with an edge.

With that being said, it's extremely easy to become gambling if you're not careful, even for the most experienced traders out there.

 

[wmram]

Trading is somewhat of a conditioned coin flip. Access to high speed internet and powerful computing, make most approaches that require some sort of a substantive point of reference (channels, cycles, etc.) easy targets for algos, whether or not some harmonic or moving average strategy will work at some particular point in time probably has more to do with who is or is not in the market at that time. So you tend to look more for setups that might lend themselves to being structured properly, and that is where trading is just like making a bet.

 

[tomorton]

There are games in which you can win or lose money through the application of your skills and knowledge. And there are lotteries. Both are gambling.

Trading is like a game in which you can win or lose money. It is not like a lottery.

 

[tomorton]

There are so many difference between trading and gambling. But introrespective, one can assume that it is the same

Trading is like some gambling but not like all gambling.

Is trading like roulette or the lottery? No, because there is no possibility of applying any skills or knowledge to these games of roulette in order to gain more wins than losses.

Is trading like betting on horses to win a race? Yes, because the bettor can use his knowledge of horses and courses to gain more wins than losses.

 

[Windlesham1]

Trading requires a basic understanding of risk. Most people are utterly clueless about risk. Tailgating on a motorway for example- zero reward, negative effect and high risk. Lotteries are low risk low expectation of reward. Trading carries an element of risk thatyou can control to a degree.

 

[WalletInvestor]

If your definition of gambling is " It is just like gambling because it also involves stakes and high risks." then you're trading wrong. Your trading should NOT involve high risk!
"you get to see the results in less than 2 minutes" Jeeze what are you trading? Have you heard of stocks? Bonds? ETF's?

I second this. It was interesting to read in the original post that trading could technically the dictionary definition of gambling - but the reality is more nuanced than that. Once you are educated and experienced enough to trade successfully, there's no way you could ever look at it as gambling.

 

[Joules MM1]

gambling is functional
trading is transactional

gambling is a function of psycho babble gibberish
trading is a transactional exercise of using an edge to impart money from the biggest money pit known to man
the biggest players turn up at the start of play , end of play or during binary opportunities

gambling is free as it's such a dumb way to impart you from your money it has to be free
trading offers such a good opportunity to arb from other players (in the spread of bid/offer)
that you pay an entry and exit to have the opportunity to extract money in that arrangement

gambling is based on the idea the house has the edge, it usually does otherwise casinos would not exist
trading is based on the idea you think you have an edge and you can lower the risk to the lowest gamble is the the brokerage you pay to exercise your right to show the world you have an edge, otherwise brokers would not bother to .....broker

waffling the ineffectual waffle about psychology of gambling is fine if that's your self-evasive thing
but gambling is not trading and vice versa by practical application and extent of probabilities available

in other words, if you think trading is gambling it is because you do not know what you are doing (as a business) and you do not understand what the auction is offering

 

[Cpr20]

No, you only gamble is you don't use strategy or do research on the stock. When you don't have a plan or when you are investing with out risk managment.

 

[wmram]

But how much of that work - that calculated work - is value added work; if the trader failure rate data is even reasonably accurate I'd say that the extra work - the calculated work - is more a result of ones attempt to avoid the financial, emotional, and psychological of a loss. A nice idea; avoiding a loss what's not to like about that but there are so many times when that mindset gets in the way. Maybe people should accept the reality (my opinion) that there's not much difference between traders and gamblers; not enough of a difference to notice. Think about it; what do traders and gamblers have in common. We both make a bet and manage risk.

 

[postman]

You have to have knowledge for both.

Did you get that from a fortune cookie?

 

[wmram]

I don't think it is the same. I like trading a lot more then gambling

So do I; that's why I call what I do trading. Regardless of what you or I might choose to call, it we are still just making a bet and managing risk. Now if your comparing someone that is patient and thoughtful about the bets that they're making with someone that makes spur of moment thrill seeking bets, I agree with you. I'd like trading more too.

 

[Winslow]

gambling is functional
trading is transactional

< SNIP >

in other words, if you think trading is gambling it is because you do not know what you are doing (as a business) and you do not understand what the auction is offering

The underlying activity involving trading is has legitimate economic value other than entertainment and to facilitate betting. Issuing additional stock allows public companies to expand without borrowing while commodities allow the actual producers to lock-in a profit at the beginning of their production cycle (yearly/seasonally) and transfer much of the risk to market participants. There are elements of trading that sometimes feel like gambling, but due to the much wider range of tradeable instruments versus gambling opportunities, there is also the ability to walk away from situations that you assess as ambiguous until you find the set-up that you have identified as giving you some type of statistical edge. As Dr. Alexander Elder says," A successful trader doesn't stare at charts to see if there is a good trade. If the trade isn't there the successful trader moves on. A good trade, though, is instantly recognizable by the successful trader. It jumps off the monitor and grabs the trader's face."

 

[jonfuentesx]

I am also surprised sometimes by the type of advertising that some brokers make relating trading with a casino, some even give you credits so that, at a certain volume of trading, you can consume them in their poker rooms or slot machines.

I think the intention is to bring the profile of a customer addicted to games to trading, basically stealing customers from a casino, trying to conceptualize trading as one more game option where they can develop their addictions.

Are there aspects of trading that are similar to the casino? Yes.

Could Soros have managed to be one of the Marxist Nation-Destroyer Sith Lord that's today with a casino? I dont think so.

 

[Windlesham1]

No, gambling is mostly based on luck, whereas in forex trading it is based on the level of forex knowledge and the skill applied in a trade to bring in profits.

No, gambling is mostly based on luck, whereas in forex trading it is based on the level of forex knowledge and the skill applied in a trade to bring in profits.

The difference is that you can change a trade any time unless you get stopped out which is just a gamble but uses stats.

 

[postman]

No, gambling is mostly based on luck, whereas in forex trading it is based on the level of forex knowledge and the skill applied in a trade to bring in profits.

Unless you can Guarantee the outcome - its a gamble. Regardless of what your level of knowledge is. Did you accurately forecast the ups and downs due to the covid outbreak?

 

[postman]

Not exactly but it sometimes does require luck and predictions at times. Forex is a huge market, so traders use several strategies and predicts price movements to buy and sell.

predict
verb
say or estimate that (a specified thing) will happen in the future or will be a consequence of something.

----------------------------------------------------------
gamble
/ˈɡamb(ə)l/
Learn to pronounce
verb
gambling
1. play games of chance for money; bet.
2. take risky action in the hope of a desired result.
---------------------------------------------------------

If the outcome is not a 100% certainty it contains risk and is by definition Gambling!

 

[Oscar Reed]

predict
verb
say or estimate that (a specified thing) will happen in the future or will be a consequence of something.

----------------------------------------------------------
gamble
/ˈɡamb(ə)l/
Learn to pronounce
verb
gambling
1. play games of chance for money; bet.
2. take risky action in the hope of a desired result.
---------------------------------------------------------

If the outcome is not a 100% certainty it contains risk and is by definition Gambling!

Bit like supporting Rochdale FC
@counter_violent