FAQ Is Trading the Same as Gambling?

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Windlesham1

Well-known member
413 21
A gamble is something over which you have no control. Poker players understand probability as do options traders. Most directional trading is not managed and it is hard to quantify trailing stops etc.
But a shopkeeper is a gambler, a publican is a gambler as these are high risk businesses. Being a private landlord? You can lose a year's profits with one bad tenant-seen it so many times. So most trading is gambling as you have no control- with options you DO have an element of control. Trading forex is mostly a forlorn hope, I've never met a successful forex trader whose sole income was from forex.
 

foroom lluzers

Veteren member
3,612 135
A gamble is something over which you have no control. Poker players understand probability as do options traders. Most directional trading is not managed and it is hard to quantify trailing stops etc.
But a shopkeeper is a gambler, a publican is a gambler as these are high risk businesses. Being a private landlord? You can lose a year's profits with one bad tenant-seen it so many times. So most trading is gambling as you have no control- with options you DO have an element of control. Trading forex is mostly a forlorn hope, I've never met a successful forex trader whose sole income was from forex.
Options is gambling with time and probabilities.

Most of the forex trading is pure gambling on a forex roulette wheel.

Only serious trading is ,if you trade like Warren buffet .;)
 
trading is taken as gambling when you do not know what to do. Trading based on luck is like taking a shot in the dark and results are often similar as of gamblers. But with a well followed trading plan and proper risk management, trading is like a business. That’s the difference between those big percent of traders losing to some small percent of professional traders.
 

hedgedequity

Junior member
13 0
It totally depends on an individual’s definition of “gambling”, it may be a “yes” or a “no”. As per the Oxford Dictionary “gamble(as a verb)” is “to play games of chance for money or bet” and “take risky action in the hope of a desired result”.

So if we go by the definition of the Oxford dictionary we may conclude that any kind of trading or speculation in the financial markets most definitely is gambling where there are no chances of ‘ifs’ and ‘buts’.
 

Quantt

Established member
944 57
The major difference is the odds are in your favor in trading (if you trade with an edge to make money), compared to the odds are in the bookies favor in case of gambling or if you trade with no edge in the market...
 

Smurai

Junior member
12 0
Hi F, I understand what your saying mate, yes I agree you can control your future not by gambling but by reducing the risk to yourself.

I think most people confuse risk and probability with gambling but they are different. As you said "you risk your life walking onto a busy road", however you always have the ability negate this risk or the probability of being hit by simply stepping back on the pavement. When gambling you do not have this option you can only wait for the outcome and hope the cars miss you.

Fred

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Taking risks is essential; gambling is foolhardy.” German general Erwin Rommel
Perfect explanation
 

NVP

Legendary member
36,168 1,761
The major difference is the odds are in your favor in trading (if you trade with an edge to make money), compared to the odds are in the bookies favor in case of gambling or if you trade with no edge in the market...
sorry - a professional Gambler has the odds in their favour same as a Pro Trader....

Gambling / Trading / Investing / speculation / Betting

all semantics .....

a person is either a winner or a loser in these games......assuming we take a cumulative view of their P/L
 

tomorton

Legendary member
7,120 921
The English language is poor with regards gambling because it uses one word "gambling" for two very different types of gambling activity.

The two types of gambling are -
games of skill
games of chance

The outcome of a game of skill can be affected by the use of the player's skills, e.g. poker, blackjack, horse race betting etc. - and trading.

The outcome of a game of chance cannot be affected by the player's skills, e.g. lottery, roulette, raffles etc.

So trading is gambling only if you accept it is a game of skill and not a game of chance. Whether you use your skills or whether you have any skills, or use them well or badly or whether you wish to win big or small, sooner or later, it doesn't matter, its still a game of skill. And so is business. So trading is a business as well.
 

FXX

Experienced member
1,136 186
The English language is poor with regards gambling because it uses one word "gambling" for two very different types of gambling activity.

The two types of gambling are -
games of skill
games of chance

The outcome of a game of skill can be affected by the use of the player's skills, e.g. poker, blackjack, horse race betting etc. - and trading.

The outcome of a game of chance cannot be affected by the player's skills, e.g. lottery, roulette, raffles etc.

So trading is gambling only if you accept it is a game of skill and not a game of chance. Whether you use your skills or whether you have any skills, or use them well or badly or whether you wish to win big or small, sooner or later, it doesn't matter, its still a game of skill. And so is business. So trading is a business as well.
The best post on this thread so far
 

NVP

Legendary member
36,168 1,761
Trading is gambling as almost everything in life is gambling; i.e. almost everything has an uncertain outcome. Life itself included.

The outcome of most activities in life can be modified by the application of skills / knowledge. But their outcome remains less than 100% certain.

The outcome of some activities cannot be modified by skills / knowledge, e.g. lottery, roulette.

Its a futile and never-ending argument whether trading is gambling or isn't gambling. Like most things, it both is and isn't.

But the fatal conclusion a newly successful trader can reach is "I am profitable, therefore I am not gambling, therefore there is no risk".

a trader cannot influence the outcome but they can sure as hell influence everything that goes into pulling the trigger :smart:
 

Windlesham1

Well-known member
413 21
Gambling it taking a position over which you have no control. Trading means using an instrument that you can control- you can close out at any time. A gamble is also an uninformed binary position, but a trade may be morphed into something else as new information is received.Trading is responsible risk management-gambling is not. Unless you fully understand your positions -both entry and exit, and the reasons for the trades you are a gambler.
 

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