Do You Think Trading is Gambling?

Exactly. Trading has a lot in common with gambling, but unlike casino gaming, you can and should trade when the odds are in your favor based on tape reading and chart and candle patterns.

So unlike gambling, it's possible to do very well over the long term with trading, if you "get it", which takes years of watching charts and practice. It's still very tough though.

Example analogy, taking a stop is like "surrender" for example if you have a 16 against a dealer 10/A in blackjack. But unlike surrendering in blackjack, we can take tiny, fractional stops if things go against us, so we have a huge edge.

And wall street, "the house", won't blacklist us if we vary our bets, eg bet heavy when there's a 10-rich deck, so to speak, eg trade double shares during a breakout volume pattern, to capitalize on during stock moves.

The new bj CSMs (continuous shuffle machines) are analogous to the new proposed !@#$ financial transaction tax, let's hope that doesn't pass... but there's still ways to win, even when there's countermeasures against us.

-k

 

if you dont know what your doing its gambling. If youve been doing it for years and know whats going on its strategy.

 

Of course. I can't understand how this question/thread keeps coming up.

Do many traders feel guilty that they are "gambling"? If the majority votes "yes", are the guilt-ridden going to quit trading to ease their conscience?

Trading is a game of skill. Card counting is a game of skill. Handicapping the ponies is a game of skill.... as is handicapping sports bets.

Gambling is when you "take a financial risk when the odds are against you with no possible way of putting them in your favor".

Perhaps it would help to think of it this way... Does the CASINO gamble? HELL NO! It's not a gamble for them at all. The odds are ALWAYS in their favor. They know that if you play long enough, they will get your money.

Could they build those monuments if their side of the bet was a "gamble"?

Jeeze Louise... if you don't have enough brain power to deduce this correctly, then you'll never get a handle on the markets.

 

Can gambling/trading/investing, be automated for a positive outcome in the long run?

 

This is how I look at. I do not consider it and compare it to gambling in the traditional sense of general gambling. But if you are comparing it to a professional gambler, then it is pretty similar. I define general gambling as just rolling the dice and hoping for the best no matter the game. In general gambling, it is all based on luck and the casino’s expectation and your lack of expectation. On the other hand, a professional gambler (which comprises maybe 1 % of gamblers at most) is someone who understands the math behind the decisions they make, its implications, can read the situation and make an informed decision on what to do. They know what they are supposed to do in that situation. Granted, they may win or lose that particular round or hand, but they understand that they can make a decision and by doing the right thing, in the long run, they will come out ahead. While they have no control over the specific outcome of any one event, if they do the right things and make the proper decisions, over time they will be successful.

It is the same in trading. A good trader has a real edge and understands what they should be doing in almost every situation. Doing that requires the discipline to follow their rules without wavering. If I take this setup every time, I may not win on this trade or the next trade, but over the long run if I follow my setups (you do have setups and a real trading plan, don’t you?) over time you are as close to an assured success as possible. My point being if I have a positive expectation and I follow my rules, the larger my sample size or the more trades I take within my rules, the closer to certainty my success becomes. You have got to love the math when it is on your side.

Now if you don’t have an edge or understand my previous paragraph and its implications, then you probably fall into the general gambling category, whether you admit it or not. If that is the case, your failure is equally assured.

Good trading

TM

 

So many of you are having such trouble with the word "gambling". Then, to make matters more confusing, you try to make others believe that if one gambles, that he can't make money. This puzzle doesn't fit.

Answer these questions:

1. Do you know with certainty that each trade will be profitable?

2. Do you ever have a losing trade?

3. If you answered "yes" to number 2, then why did you make the trade, if you know that trading isn't gambling? (Mad at yourself?.....Mental problems, or what???)

3. Do you have a money management plan?

4. If you answered "yes" to #3, why do you have a money management plan?

Now, the answers, of course, are obvious, but they are asked for a purpose. If you trade, what you do know with certainty is that some of your trades will be winners and some will be losers.

Don't tell me that you're not gambling because you are able to win in the "long run". You are gambling each time you put down your money in hopes of making a profit, because you cannot guarantee me, or yourself, that the trade will make money.

Many of you are saying that if you are gambling, you will lose in the long run. aaannnnk.....Wrong answer. You should be saying: If you know how to gamble (a.k.a. trade), you can win in the "long run".

Therefore, there are some here, I am reasonably sure, who know how to trade. But for some strange reason, refuse to call it gambling.....BOO! See? It's not so scary.

So, call it what you like. You can put lipstick on a pig, but you still got a pig.

So let's take another look at the definition of "gamble". From dictionary.com:

gam⋅ble   /ˈgæmbəl/ Show Spelled Pronunciation [gam-buhl] Show IPA Pronunciation
verb, -bled, -bling, noun
–verb (used without object) 1. to play at any game of chance for money or other stakes.
2. to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.
–verb (used with object) 3. to lose or squander by betting (usually fol. by away): He gambled all his hard-earned money away in one night.
4. to wager or risk (money or something else of value): to gamble one's freedom.
5. to take a chance on; venture; risk: I'm gambling that our new store will be a success.
–noun 6. any matter or thing involving risk or hazardous uncertainty.
7. a venture in a game of chance for stakes, esp. for high stakes.


Hmmm...Anything vaguely remind you of trading?? ;>)

 

Both of these questions are irrelevant. A casino has no idea which bets they cover are going to be winners or losers, but that doesn't mean they're gambling. It only matters that after they make thousands of bets whether they win or lose. I've said it before and I'll say it agin, if you have a bet where you are guaranteed to win 80% of the time, and you place the bet 1000 times in a row, simply not knowing in advance if any single bet is going to be one of the 800 you'll win or one of the 200 you'll lose on does not make it gambling.

You said it best.... its vaguely similar to gambling. There are many books written that have entire chapters dedicated to this subject (there was even a previous poster who said he had a college text book covering this very question) and all of them have come to the same conclusion you just came to: its vaguely similar.

I bet you can't find one credible book from one credible source that supports your claims. As a matter of fact, I would challenge you to find any book from any source, credible or not, that supports your claim.

The only argument that you keep making that is actually true, is that where odds and probabilities are concerned, the result of any single event are uncertain. The laws of averages only become meaningful and significant given a large enough sample size, and are absolutely meaningless in small sample sizes.

Under your very own definition, casinos are also gambling, which couldn't be further from the truth.

 

Casinos not gambling? Eh? Gambling is their sole business.

Some casinos win, some go bust. Just like traders.

 

Of course, they are gambling. But, they know how to gamble.

 

Jachyra---

If a person had wanted to wager 10 bucks on the outcome of the Superbowl, would you have taken the bet and put your money on your favored team?