Well, then you'd be incorrect. But the beauty of a free society is that you are more than welcome to think whatever you'd like.
Any credible dictionary will disagree with you. Respectable, honest and legal professions? The financial markets are as dodgy as the 'gambling' markets, and about as many people have no idea. The negative connotation is generated by the ignorant masses, so if your problem is that people look down upon what may or may not be your profession, then your problem is with them.
If you trade and you say that trading is not gambling, then you apparently are executing 100% winning trades. So, if you know that trading is not gambling, then doesn't a losing trade indicate some level of mental incompetence? For, when the outcome is certain, there is no gamble. But, if the outcome is not certain, then there is a gamble. So, if you are one who wins 100% of the time and at the point of execution you know that your trade will be a winner, then, you are not gambling. Also, I believe that it is helpful to a trader to understand and accept that putting on a trade involves the chance that it may go his way, or it may not. This is part of the deal. This is where money management comes into play. So what if trading is gambling. Does that really have anything to do with profitability? No.
Thats like saying that the casino is gambling just because they don't win every single bet, or that an insurance company is gambling every time they have to pay out an insurance claim. In odds based businesses, you win some and lose some, thats why they're called odds based businesses. Winning or losing money on any given odds based opportunity is not what determines whether or not its gambling... only whether or not the percentages are in your favor when the bet or position is established. Technically, it has to do with whether or not the bet or trade has positive or negative expected value over the long run. If you have +EV then its clearly not gambling... if you have -EV then by definition it is. Look at it this way... if you place a bet where your odds of winning are 80%, and you make $1 every time you win and lose $1 every time you lose... on average, if you take the same bet 100 times, you'll win 80 times, giving you a gain of $80, and you'll lose 20 times, giving you a loss of $20. That means that if you took the same bet every single time, and took it enough times to make the sample size significant, you'd net a gain of $60 every 100 bets. In this situation you'd have +EV and by definition you would not be gambling. The fact that you lose 20% of the time in and of itself does not make it gambling. The only way it would be gambling is if you were on the other side of the bet in which you only had a 20% chance of winning. Then you'd win $1 20 times out of a hundred, giving you a profit of $20, and you'd lose $1 every 80 times out of 100, which would be an $80 loss... so you'd be netting a loss of $60 on average for every 100 times you placed the same bet. In this situation you'd have -EV and by definition you would be gambling, because the only way you could possibly turn a profit in the long run would be if the laws of averages took a random walk and you ended up winning more than the 20% of the time you were supposed to. Of course this reminds me of that old saying that Henry Ford once said... "whether you think you can, or whether you think you can't... you're right." Well in this respect, "whether you think trading is gambling, or whether you think trading isn't gambling... you're right." Because if you're engaged in an odds based business and you don't even know the difference between playing the odds and gambling, or don't know anything about positive or negative EV... then most likely you are in fact one of the many market participants who are gambling... but just because you are gambling in the markets don't think for a second that everybody else is gambling. I assure you that the best traders in the world spend a lot of time trying to make sure that they consistently don't find themselves in situations where they're gambling (although even the best will find themselves in that situation every once in a while). It is correct to say that it is possible to gamble in trading if you want to, or that sometimes, depsite your best efforts to avoid it, you find yourself in situations that in retrospect ended up being a gamble. But its not any more correct to say that trading is gambling than it is to say that trading is a unicorn.
Yea its gambling. You put your money down and bet it will be worth more the next day. But with a lot of homework and research, the odds can be heavily in your favor. Just because you are smart and you mostly win doesn't mean its not gambling. But, then you have to ask, so what if its gambling. Its not illegal and we dont have to hide or anything, so there is really little point to the question. You may as well next ask if a blow job is considered sex. Hmmmmm, not according to president Clinton...
"Odds based businesses".....LMAO. Let me guess; Currently, or at some time in the past, you were a state or federal government employee. My brother, we are just gonna have to agree to disagree. I believe the "odds" are in my favor and I think you are in a "losing trade" on this one.
Just as a side note; "smart" doesn't matter much. In trading, I'll take discipline and determination over smart.
Was posted back on Dec 31 2006 http://www.usatoday.com/money/perfi/columnist/krantz/2006-01-31-day-trading_x.htm Rolling the dice: Day trading is gambling Q: My brother (and business partner) has gotten into day trading in the last year or so. He claims to be "investing," not gambling, but I've heard many horror stories. Should I be worried? A: You can always tell when the stock market is getting better, because the day traders come out of the woodwork. Unfortunately, a vast majority will wind up grinding their retirement money into sawdust. In my opinion, day trading is gambling. Whether or not you should be worried, though, depends on how much money your brother is gambling with and what would happen to your business if he squanders his assets. To explain why I'm so skeptical of day traders, we must first decide what the term means. In my mind, a day trader is an individual who tries to make fast money by buying and selling stocks, options or other securities after holding them a few hours, days or weeks. Unlike investors who buy diversified baskets of stocks and hold them for a year or more despite short-term swings in the market, day traders try to profit from those swings by buying low and selling high. But don't expect a day trader to tell you he's a day trader. The term has gotten a bad rap, primarily because so many of these people got destroyed by the last bear market. So today, they're calling themselves everything from "swing traders" to "market timers." Many claim to have found some magical loophole in the public markets that only they know about. If you ask these day traders to explain what they're doing, their explanations are usually plausible. And since markets' daily moves are random, there is a chance day traders can make money in the short term. But when they're explaining their "secret" to you, you need to sit back and pay attention and use your reasoning. Keep in mind even some blackjack players may have a lucky night or two, but over time, the odds will catch up with them and reclaim those winnings and then some. There are two main reasons why the vast majority of day traders will lose their shirts: ⢠Disadvantage to large institutions. Have you ever seen a $20 bill lying in the street? It's rare, but it does happen. The same thing can happen on Wall Street. For various reasons, a stock or other security may temporarily (even for a few seconds) become under- or overvalued. Traders are in the business of picking up these $20 bills on Wall Street. Giant Wall Street firms and hedge funds have massive trading desks that do this. They spend millions on equipment and on experts who have the full time job of finding incorrectly priced securities. So, why would your brother, with his discount brokerage account, think he can even have a chance against the resources of these well-funded trading firms? ⢠Diminishing returns. The next issue is a harsh reality. If someone is lucky enough to find a way to make a short-term profit, the method is quickly copied by other short-term traders. And when enough people try to take advantage of a market inefficiency, that inefficiency disappears. As you can tell, I'm not a big fan of day trading. I just think the odds are stacked against day traders. The chances of suffering big losses are much greater than the ability to generate gains over the long term. Study after study has confirmed that most investors are unable to beat the market long term. I have spoken with day traders who have lost large amounts of money, and regretted it. How you deal with your brother is up to you, though. Maybe he's treating his trading like some gamblers deal with Las Vegas: They play with a set amount of money, say $200, that they are prepared to lose. If he's just doing it for fun and realizes he'll most likely lose before long, that's one thing. But I would be concerned if he is gambling with money you need to operate the business. Matt Krantz is a financial markets reporter at USA TODAY. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com.
Well like I said previously, its a free country and you're certainly entitled to believe whatever you want to believe... but just because you believe it doesn't make it so... just like people who believed the world was flat certainly had the right to do so, but it didn't mean it was true. For your sake, I certainly hope you are an investor and not a professional trader, but if you are trying to make a living at this business, I'd suggest you do a google search on this topic, as well as +/-EV, or go get yourself a good book. This is pretty basic stuff that most traders already know... at least successful ones.