Great post. In the end they are very similar. It all comes down to money management/what you put into it. You see a great set up, you have to put on a big position. You find an angle with a horse you like, gotta send it in. I know a few professional horse players who do VERY well. It's all about putting the time in. When things arent going well bet less. When things are going well....bet more/trade bigger. I do agree with the guy who said the vig in horse betting is tough to overcome. But it can be done. I had the pleasure of spending some time at the track with Andy Beyer. The guy is a genius. Probably similar to spending a day with Tudor Jones on his trading desk.
With most gambling games, the odds are NEVER in the player's favor. Only games I can think of where the player can bet with favorable odds are (a) counting cards in black jack, and (b) knowing the favorable numbers on a roulette wheel. (The house will ask you to leave if they suspect you are smart enough to do either.) So... profitable trading is like "betting black jack when the deck count is in your favor"... and that's different from gambling.
I agree. I suppose that the distinction some people here are trying to make is the difference between intelligent, informed gambling and stupid gambling. Everything else largely comes down to semantics.
Your definition of "gambling" is incomplete... it should include "when there are fixed odds against you".
When I finally got it that the markets are mostly non-predictable, it was like the scales had fallen from my eyes. I started designing systems that embrace randomness instead of shunning it. It can be done. Of course if the markets were completely random, there would be no way to have any kind of edge (especially after commish). They aren't. They're just more random than most people would like them to be.
I don't believe that trading is about probabilities. I don't think it is that refined. It is more about tendencies and uncertainty, because there is no legitimate and stable probability distribution to hang your hat on with respect to future market prices. (Unless you all having been keeping something from me!) However, I am willing to go with the term "balance of probability," since it does not imply numeric specificity and is more suggestive of general tendency.
Actually, gnome, I agree with ElCubano on this one. I think your definition is burdened with a bias that does not strictly reside in the definition of the word: http://www.wordcentral.com/cgi-bin/student?book=Student&va=gambling However, I think we all largely agree on the same thing and are merely haggling over semantics.
True. Gamblers love to take on negative expectation situations, and even if some get lucky for a while, many of those will press their luck until it dries up.