TWENTY QUESTIONS 1. Were you ever late or skipped work or school due to trading? Yes 2. Has trading ever made your home life unhappy? Yes - I get annoyed when I lose 3. Did trading affect your reputation? Yes 4. Have you ever felt remorse after trading? Yes, after trading badly 5. Did you ever trade to get money with which to pay debts or otherwise solve financial difficulties? Yes - I trade to solve the financial difficulties of not having a high enough income 6. Did trading cause a decrease in your ambition or efficiency? Yes - I become more lazy after earning a lot 7. After losing did you feel you must make another trade as soon as possible and win back your losses? No 8. After a win did you have a strong urge to win more? No more than usual 9. Did you often trade until you got a margin call? No, I always have had enough in the account in the first place 10. Did you ever borrow to finance your trading? Yes 11. Have you ever sold anything to finance trading? Yes - sold some shares. 12. Were you reluctant to use trading capital for normal expenditures? Yes, until I built up my capital to a decent amount 13. Did trading make you careless of the welfare of yourself or your family? No 14. Did you ever trade longer than you had planned? Yes 15. Have you ever traded to escape worry or trouble? No 16. Have you ever committed, or considered committing, an illegal act to finance trading? No 17. Did trading cause you to have difficulty sleeping at night? Yes, when I trade the Asian markets 18. Do arguments, disappointments or frustrations create within you an urge to trade? No 19. Did you ever have an urge to celebrate any good fortune by trading more? No 20. Have you ever considered self destruction or suicide as a result of your trading? No If you answer yes to at least 7 of these questions, you could benefit from learning how complusive gamblers struggle to solve their addiction and draw relationships to your trading. Answered YES to 11 questions, I guess I better watch out
Very well stated. Compulsive gambling, like overtrading, is due to psychological reasons. Good point. DNAJ65000
You hit it spot on. You understand the point of my post and I think it is largely due to the fact that you are one of the lucky minority who is consistently profitable. The point of this tread is to help other yet to be consistently profitable traders realize that their trading method could be considered gambling. Like you say, it's how it's implemented by the individual that can be deemed gambling or not. By going to GA, I realized that I am part of that 50% or more of traders that IS gambling. Losing money, not having an edge, not being consistent, not being able to get a positive long term result tells me that I have not turned trading into a successful business yet. My hope for others reading this thread is to open their eyes that they may be gambling their capital away as well. And realizing and admitting that fact, that the reader may wish to reflect on their trading style and what they really want from trading. I feel like I've made a paradigm shift in thinking since attending my first ever GA meeting. If this thread has planted a seed into a fellow struggling trader to self-improve, then the purpose of sharing my experience is worthwhile. The people replying that take offense to my post like 2yearnewbie are ones who do not wish to look inside themselves for the solution. The people who read this and never reply but think about the topic are the ones that, IMHO, are open minded and on the path(however long it is) towards success. DNAJ65000
Thanks for the multiple illustrations. The common thread to all of this is uncertainty. Since the future of anything is uncertain, every decision to take an action, lets say an occupation, is a risk. Trading, in my opinion, brings on more potential risk per unit of time, so those who have not learned to manage risk see the downside faster than they might in other occupations. Results are measured by the day by our P/L. Results of a person, lets say a doctor, who practices their craft poorly (risking expulsion) generally takes a lot longer to uncover, and then expose the results of that risk (losing money, job, career, jail) to the bad physician herself. Risk is inherent in every occupation. Uncertainty is the only known. As a trader, I am constantly more aware of promises made my individuals or institutions of anything that is "certain." Even people who don't admit that things are uncertain deep down know that this is so. The person who is wealthy who puts their trust on income, these people are constantly afraid of losing it. People like this can't tell you why, but the real reason is deep down, everyone knows that nothing is certain. The fact the most people cannot articulate this fundamental truth does not refute the existence of uncertainty and risk being a part of the future. Accepting uncertainly goes a long way to manage compulsive behaviors, like bad gambling or bad trading. Compulsive behaviors result from a need for certainty, and that can never be satisfied completely.
TWENTY QUESTIONS 1. Were you ever late or skipped work or school due to trading? Yep. When I started making money I stopped going to class. Eventually they told me I was no longer welcome there. 2. Has trading ever made your home life unhappy? Certainly. I was starting off without much and lost most of it. Did not make me a happy camper. 3. Did trading affect your reputation? I guess. The trash side of my family asks me for loans..not really loans but "gimme money we share a strand of DNA" stuff actually. 4. Have you ever felt remorse after trading? Yep. I still make 2 or 3 dickhead trades a month at least. 5. Did you ever trade to get money with which to pay debts or otherwise solve financial difficulties? Yeah since its how I get most of my money. 6. Did trading cause a decrease in your ambition or efficiency? No 7. After losing did you feel you must make another trade as soon as possible and win back your losses? No 8. After a win did you have a strong urge to win more? No 9. Did you often trade until you got a margin call? No 10. Did you ever borrow to finance your trading? Yes 11. Have you ever sold anything to finance trading? Yes 12. Were you reluctant to use trading capital for normal expenditures? Yes 13. Did trading make you careless of the welfare of yourself or your family? No 14. Did you ever trade longer than you had planned? Well Toni told me today that we had to leave by 2 and I'm just finishing up..so I guess so. 15. Have you ever traded to escape worry or trouble? All the time. To me trading is kinda peaceful..call me wierd. 16. Have you ever committed, or considered committing, an illegal act to finance trading? No, but I was once accused of trying to pump and dump GE (Not kidding) 17. Did trading cause you to have difficulty sleeping at night? Yeah sometimes. Someone discusses this is market wizards. 18. Do arguments, disappointments or frustrations create within you an urge to trade? No 19. Did you ever have an urge to celebrate any good fortune by trading more? No 20. Have you ever considered self destruction or suicide as a result of your trading? No, but there have been market makers and specialists I wanted to kill. 12 yes. Hello, my name is brandon..Im a trader. Hello Brandon.
TWENTY QUESTIONS - applied to starting a new business 1. Were you ever late or skipped work or school due to starting your business? 2. Has starting a business ever made your home life unhappy? 3. Did starting a business affect your reputation? 4. Have you ever felt remorse after starting a business? 5. Did you ever start a business so you could have money to pay debts or otherwise solve financial difficulties? 6. Did starting a business cause a decrease in your ambition or efficiency? 7. After failing in your business, did you feel you must start another one, as soon as possible and win back your losses? 8. After starting a successful business, did you have a strong urge to win more? 9. Did you often work on starting your business until the banks called to collect the initial loan? 10. Did you ever borrow to finance your new business? 11. Have you ever sold anything to finance starting you business? 12. Were you reluctant to use business profits for normal expenditures? 13. Did starting your own business make you careless of the welfare of yourself or your family? 14. Did you ever take longer to start a business than you had planned? 15. Have you ever started a business to escape worry or trouble? 16. Have you ever committed, or considered committing, an illegal act to finance your new business? 17. Did starting a business cause you to have difficulty sleeping at night? 18. Do arguments, disappointments or frustrations create within you an urge to start a new business? 19. Did you ever have an urge to celebrate any good fortune by starting another new business? 20. Have you ever considered self destruction or suicide as a result of starting your new business? I think one of the problems is that people confuse TAKING RISKS and gambling. This is all about semantics. If you define gambling as taking any risk, then just about EVERYTHING is gambling. I define gambling as takings risks WITHOUT a well thought out, researched, reason. Like traders, business men take risks as well. But like traders, some are gambling, and some are not. The business men with a PLAN and the trader with a PLAN, with a good probabilistic EDGE they have researched, are NOT gambling in my opinion. For the same reason, the HOUSE at a casino, is NOT gambling. Their money is pretty much guaranteed over the long run. Gambling is a psychological flaw. When you cannot control yourself, and take un-researched risks, THEN you are gambling. peace axeman
This is an interesting thread. I agree on axeman's points. Basically, there is a huge difference between taking a stupid risk and a calculated risk, preferably with a higher reward ratio. And let this be mentioned : Gambling, by definition, doesn't have to be "gambling", either. There are some seriously kick-ass pro gamblers out there. If I'm not mistaken, Don Bright's brother (Bright Trading) once gave up everything to become a pro gambler, moved to Vegas and made it. I for one, know from first-hand experience that pro gambling is in fact even easier than pro trading. Think you can't make money gambling? Well, you don't have a chance in trading then. Pro gambling is extremely similar, in that you need to develop or adapt a system, back-and-forward test it (i.e. tester books), know your exact R:R ratios and loss limits. You need to apply a lot of discipline and other things, but the advantage is that you don't have to act fast, and the "odds" are generally the same and tend not to change in a thousand years, very much unlike trading. Before I started pro trading, I did some research into gambling and found games with the least house edge, such as Baccarat, which can be well overcome. Got some systems and there I went, playing online casinos. I did make boat-loads, too because the online casinos can deal as fast as you like, and you can play several shoes per hour, so I doubled my bankroll every 2 days or so, pulling out several K per day (this was a lot to me at the time, I was poor, yada yada). But I soon figured that it was short fun, since all the online-casinos were blacklisting me, and even sharing their blacklists! It was only a few weeks until no online casino in the world would accept me. I didn't feel like going to real casinos to have my legs broken, either, so I wondered what I could as a substitute. Trading came into my head, and although I was always interested, and already doing occassional position trades, I hadn't yet faced short-term trading. As I was to find out pretty soon this was going to be one the biggest challenges I was to ever face, it certainly wasn't as easy as gambling. This was a couple of years ago. I made it eventually, moved from stocks to ES & NQ, and here I am. The greatest thing about trading is that your broker, very much unlike a casino's pit boss, loves you to win. Bottom line : It's an easier trade to gamble without gambling than the trade of trading without gambling. Scientist.
From today: The Gambling Analogy: Consider the Advantages "Trading is like gambling." Some say trading "is" gambling, but for now, let's just focus on the proposition that trading is analogous to gambling. An analogy is a comparison between two things that are similar in some respects. People use analogies to explain a complicated topic, or to understand a complicated topic. Trading must be complicated, since it seems that 95% of those who attempt to trade end up failing. It's either complicated, and thus, we need to use an analogy to understand it, or it's an impossible task, like trying to survive jumping off of a high cliff. Some people survive the fall, but most do not. If it's impossible, an analogy isn't going to give us much help. But assuming that trading for a living is viable under the right conditions, most novice traders are willing to use analogies to understand complex trading issues. In considering any analogy, it's essential to avoid confusing the analogy with the actual phenomenon that one is trying to understand: Trading is like gambling, but it's not exactly like gambling. A dictionary definition of gambling is "playing games of chance or betting in the hope of winning money." At Innerworth, we sometimes get letters rebuking us for propagating the "myth" that "trading is gambling." Now look at that dictionary definition. Trading is indeed a "game of chance," since it is not a 100% certainty that one can put on a trade (or a long-term investment for that matter) and be guaranteed a profit. And why do you trade (or invest)? You do so with the "hope of winning money." So from a purely semantic argument, trading is gambling. "But casinos are the only officially permitted institutions that allow legal gambling and the institutions that oversee trading and investing are quit different," is what critics of the gambling analogy shout with fervor. All right. We'll give you that one. Here's another debating point we will give you. In the "Diagnostic and Statistical Manual of Mental Disorders," the "bible" used as a reference by all mental health professionals, there is a disorder called "pathological gambling." It usually refers to the base aspects of gambling. Gambling can be an addiction, like alcoholism, and no reference is made to "pathological trading." So I guess that means that the society as a whole has yet to recognize a pathological version of trading. If it's so important to you to argue to your friends and loved ones that you are not gambling by trading, there's some ammunition. But whatever you call it, it's just a form of denial, because like it or not, you are gambling. So now that we've temporarily kept the critics at bay, let's get down to business. How is trading like gambling? And how can using this analogy help you understand trading? No one has developed the ultimate signal or indicator that allows a trader to anticipate the next market move with 100% certainty. There's some risk involved. And again, that's what makes it gambling. So the gambling analogy is useful. The fact that you can lose money should be at the forefront of your mind; you aren't putting your money in an FDIC insured savings account. Once you acknowledge risk, you can take precautions to protect yourself. Unless you want to act like a "pathological" addictive trader, it's wise to define your risk clearly before entering a trade, take measures to protect yourself, and set up an exit strategy, should fate move against you. Since trading is a matter of probabilities, it's to your advantage to limit your risk to a small percentage of your total trading capital on any single trade, for example. That will help you survive a severe drawdown and stay in the game. You'll be acting like a professional gambler rather than an amateur. Perhaps the greatest value of the gambling analogy is the mindset it offers the trader. If you look at trading as a game of chance, it allows you to think in terms of probabilities: trading is a matter of capitalizing on chance across a series of trades. The outcome of a single trade is of little importance, since if you make enough trades, you end up with an overall profit. Mark Douglas wrote one of the best expositions of this thinking strategy in "Trading in the Zone." When you play some games of chance, the distribution of all possible outcomes can be represented by a probability distribution in which some outcomes are more likely than others. For example, when you throw a pair of dice, there are 36 ways for the dice to fall, and about a 3% chance of getting a 2 or 12, and about a 20% chance of getting a 7. Traders try to find the high probability trades; it's like betting on getting a 7. You may try for a 7, but there's still a small chance of getting a 2 or a 12. But the more times you throw the dice, the more the law of averages works in your favor. That is, about 20% of the time you'll get a 7, if you throw the dice enough times (but theoretically, there's still a chance you will never get a 7). Throwing dice is analogous to using a trading strategy with a proven track record. If you use a trading strategy with a historical track record of 80%, for example, you should expect it to work 80% of the time. It's all a matter of executing the strategy effortlessly and mechanically over and over so that the odds will work in your favor. (But unlike casino gambling, where someone knows the odds, and the "problem space" is essentially identical time after time, a trading strategy is rarely executed in an invariant problem space; history only repeats itself when it does. The gambling analogy in this instance doesn't hold. The professional gambler has better odds because theoretical laws of probability apply to traditional games of chance, but not to trading strategies.) When you work under the assumption that you are doing nothing more than playing a game of chance, where the more trades you execute, the more the outcomes will follow a probability distribution where the outcomes are skewed in your favor, the more confident you will feel. As you execute the strategy over and over, you can remind yourself, "I'll trust my strategy, repeat it over and over, and the odds will work for me." The gambling analogy in this case gives you an edge. It puts trading in manageable terms. You'll feel more relaxed, confident, and trade effortlessly in a peak performance state. In the end, there are more advantages to viewing trading as gambling than not. By doing so, you will acknowledge the potential risk immediately, and take steps to minimize it. At the same time, you'll also be able to use the thinking strategy of looking at trading as a matter of probabilities. The relaxed, confident approach you will achieve from this mindset will give you a mental edge.
"When I was young, people called me a gambler. As the scale of my operations increased I became known as a speculator. Now I am called a banker. But I have been doing the same thing all the time." -- Sir Ernest Cassell, banker to Edward VII And hmm did I mention I can relate so f much with the "dream world of the compulsive gambler" quoted from the GA booklet, its not even funny, it actually scares the shit out of me.