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Difference Between Trading and Gambling


Hi Everyone,

I got myself searching more about trading as it is what I do. Now, I bumped into some articles about "Trading as Gambling" and some defended it as exclusively different. I would like to share what's my opinion about it so you might get some insights on how I see trading as my work.

Some say, gambling is closely similar to trading 'cause gambling takes one person to take a risk whether to gain profit or the opposite. However, others assert that gambling is far different from trading 'cause if you trade without exerting your full blast effort then that's called gambling - spending money and simply waiting for something to happen.

For me, I'd rather combine the opinion of the 2 traders 'cause it, indeed, takes diligence in your work to reach success. However, I came to realize that exerting great effort is good but with the assistance of your strategies and styles in trading since there is NO EXACT strategy of trading - it's dynamic. If you try to stick on one strategy until the end of time then you might closely experience loosing.

Now going back to my point, even if you put all your efforts but to the uneffective strategies then you might as well lose. As the saying says, "Practice does not make perfect. ONLY perfect practice makes perfect.

That's what sometimes, I call trading as gambling 'cause you might thought you have given your best but yet it's not enough. You risked, you gamble 'cause you don't know what lies ahead. Yet, if you are wise enough, make sure and be confident that you do your best (the true best) in trading then you can claim that trading is different from gambling. Be creative, strategic, innovative but NOT to the extent of fooling other people. Search for more training and guidelines. The secret of those successful ones is that they DON'T STOP in one better place. They improve from time to time. They love learning.

That's my point.

That's all for today. Have a great day folks!

Sincerely,

Gladlav


The difference between trading and gambling is fairly simple:

Gambling: Your expected return is 50% or less.
Trading: Your expected return is more than 50%.


Edit: That was wrong above.
Gambling: Your probability of a favorable outcome is 50% or less.
Trading: Your probability of a favorable outcome is more than 50%.

Expected return includes all costs associated with your activity.

Here are some articles:

Is day trading gambling?

Trading and Poker compared
I consider Trading to be exactly like gambling but not because you are placing a bet or playing the odds

I should say Trading is exactly like professional gambling. Take poker players for example, a pro poker player knows to NEVER play the hand but to play the person. An amateur player will bet according to the strength of the hand he holds whereas a pro knows to play the person he's playing against, the strength of the hand he holds is of little importance to him. (this could use some further explaining but I don't feel like doing it right now)
Purely my opinion

Gamblers

1. The One who usually trade INTRADAY basis make lose.
2. The One who dont know/understand how market moves make lose.

Traders

1. One who understand the Behavior and Timing of particular market for Trade is Trader.
2. One who understand how much should be the profit and loss before entering into trade is Trader.


Morale of the Story is the one who make Loss call Gambling and left over call it TRADING.

Sushil

Originally posted by gladlav

Hi Everyone,

"Trading as Gambling"

'cause you don't know what lies ahead.

The problem with discussions like this is each participant has a different "internal definition" of the words gambling and trading.

If you mean to say there is risk in both endeavors you are correct, as every human endeavor has some element of risk. If you are talking about participating in something that has a random outcome you would be wrong; as there are many forms and styles of trading that do not have random outcomes.

For a thread like this to be of any value, you must define your terms and use precise language.
In gambling the person pays first to see a pattern

In trading the person sees the pattern first then pays
Trading is basically gambling with an edge.. but don't underestimate the difference even a small edge can make.. There's a reason that casinos are so profitable with their small edge.. There's also a reason why casinos won't allow you to participate if you possess that small edge by counting cards at the blackjack table.
However, casinos will allow you to gamble with an edge when you're playing poker because their money is not at risk. In games like this they take a rake so they want (1) the hands to move fast and (2) the pot to be big.
Well, the difference is:
In gambling, you can bet while having a drink and if you lose, you still have fun.
In trading, losing isn't fun, but you can drown your sorrow with few beers ^_^ .

On a serious note:
IMHO, there is a similarity based on emotional aspect, and for me, it is an advantage to have that "professional gambler" ability to trade successfully.
ie. having a trade setup and pulling the trigger without hesitation.
Trading is when you place a trade and “win”. Gambling is when you “lose”

(I guess I always gamble…Lol)