When I first started trading years ago I would have said it wasn't gambling and that trading was just equivalent to repetitive short term "investing" because you have an edge and a positive mathematical expectation over the long run. Now though I do think it's gambling because no matter how good the trading system... the future is always an unknown and even the casino can lose over extended periods. So now I gamble with my money by using a positive mathematical expectation over the long run. I essentially "card count" the market with an edge better than I can get in Vegas playing blackjack. And there are so many various tables to play in the market that I can easily pick and choose and find the best dealers to play with based on the "characters" that participate in the various markets.
My reply is that it is not a statistical fact that a +ev bettor (whether in traditional gambling or the markets) will win over the longterm. There is no certainty. I was certainly a +ev poker player, but I had what at the time was an unrivaled losing run at SNGs (a type of poker game). Many were questioning whether I was +ev at all, although these were from mainly newer and poorer players, while the good players didn't question it at all. I was just one of the 'unlucky' to be caught on the negative side of extreme variance. I wasn't the only one to experience this, and some notable players had some awful runs at a similar time. It's just part of the game. What is the game? Everything. We live in a world dictated by probability, and absolutely nothing is certain. At first I thought you were just debating definition, but now it seems you think probabilities don't apply over the longterm, i.e. you're completely ignoring variance. I love the last phrase of your post: "that is a statistical fact". You are guaranteeing the outcome in an environment that is ruled by probability. Since the outcome in any one trade is not certain, then the outcome of any number of trades can't be certain. Therefore, certainty of success over the longterm cannot be guaranteed, and this logic is undeniable. All a +ev bettor does is give themself the best chance of success over the longterm, and this is obviously by making +ev bets continuously. This, however, will never guarantee their success. I suppose if you acknowledge this, you'll justify your previous post by suggesting that it is so unlikely that it isn't worth considering. Well, it's far more likely than you realise, and not realising this is a serious flaw in your understanding.
gam·ble (gmbl) v. gam·bled, gam·bling, gam·bles v.intr. 1. a. To bet on an uncertain outcome, as of a contest. b. To play a game of chance for stakes. 2. To take a risk in the hope of gaining an advantage or a benefit. 3. To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke. In the sense of 1.a, traders are gamblers because the bet on an uncertain outcome, regardless the presence of an edge or methodology. 1.b, traders are gamblers if the market is a game of chance for stakes. I do not know the answer to this. It is probably not a technical issue but a matter of perspective. 2, traders are gamblers, because they take a risk in the hope of gaining money 3, traders are gamblers if we consider their acts potentially hazardous to their accounts and in certain cases to their health. Therefore, we can conclude that traders are gamblers, although, contrary to common belief, gambling is not always a sensless and useless activity.
Hey, I have just designed a completely new and non-gambling trading system, it involves a dice and a coin, it trades once a day: 1. At the open I roll the dice. It will give the entry time, 1 means 10 am, 2 means 11 am, ...6 means 3 pm. 2. I flip a coin, head means long, tail means short. At the time determined in Step #1 I go long or short of ES futures according to the coinflip's result. 3. Automatic 5 pts target and 5 pts stop loss. Whichever gets hit first takes me out of the position. If neither is hit by 4 pm, I exit at the close. Can someone write a code for this clearly scientific and non-gambling trading system and backtest it??? Many thanks....
Pek, how about this one, find a H&S pattern on a monthly/weekly chart and keep shorting neckline support with stops being say 1/50th of a realistically projected target.
Good post, ib. But, sit tight bro. Some will come along here and string together a bunch of superfluous speech in an attempt to "prove" that your factual statements are wrong. Very entertaining.
No one ever said that dishonest people are not also operating in the buying and selling of shares! You have to be in the world of reality when you put your money at risk - if you don't want to lose that is!
What you, or anyone else thinks, is irrelevant! If a person wantsâ to take money from other people, then that person needs to know some very basic facts about trading the instrument/s that they have chosen! When the basic facts are understood, the next step is to gain real "experience" with losing and winning! The final step is not as many think and do! Few are aware of it, and even fewer understand and practice it!