Of course I know you won't reveal your system but could you give some general guidelines for newbies?
Wrong. Here in SoCal buying a home between 1996 - 2006 was a sure bet and an EASY investment. I've flipped many new construction homes where I only put down $2K - $5k as a deposit, used 100% bank financing to buy once the home was built and sold before the first mortgage payment was due, for $65k - $100k profits per house. In fact, I can think of no better investment that I could have made during those years. Of course now that the RE market is down trending that gig is up. It was very easy to see the reversal before it happened. March 2007 Subprime lending went away -- game over. So the real answer to this thread is NEITHER. For those that are skilled and know how to trade, trading is INVESTING. Those that are new and do not understand market trends, fundamentals, psychology and how to trade are GAMBLING. It's that simple.
Hi ElectricSavant, About a month ago I came up with this exact same idea (although a different number of pip increments), but I've set it aside after being unable to come up with a way to handle the drawdown. Yes it would work fantastically during ranging periods, but when the market starts to trend you would accumulate such a massive drawdown that not even the best intraday volatility would make up for. For example, using your 20 pip increments, after price moves ~500 pips against your first losing position, you would have on 25 losing positions and a single 20 pip move against you at that point will be ~500 extra pips drawdown. 100 pips against you and you've just added nearly 3000 pips to your unrealized losses. Even if you cut your losses/reset at a certain pip # drawdown, you would still need a market which has sufficient intraday volatility but slow moving longer term. At least as far as I can see. Haven't been able to find one that suits it yet, though certain European cross currencies look interesting. My question then (off topic I know), did you come across this problem, and did you find a way around it? (Just whether you did or not, not asking for the solution.) Thanks
Wow..That was a long time Ago! Yes I came to the same conclusions you did... Trading is Gambling...or Not Gambling...Did you vote ? ES P.S. Trade size and spacing for a 10 Year Range would tie up too much capital and you would need to enter in the middle. Also interest earning carry trades sometimes change with this extreme long term strategy...then what do you do? I have a carry trade going now...you can see my blog/hub.
I didn't vote because it depends on the definition of gambling. If we're using common parlance then no (although you can of course gamble in the market), if we define gambling as merely putting money at risk over an uncertain outcome then yes. If you have a statistical edge then each single trade may be considered a gamble, whilst your trading as a whole is not. imo
My opinion till now it is one of the finest art of science. That require the best minds and the best tools Happy trading all
In answering this question an awful lot depends on how one plays and executes their game: * If one always trades knowing what ones odds are, and entering only when those odds are in ones favor, then one can be said to be properly speculating. * If one always trades without knowing what ones odds are, and whether or not those odds are in ones favor, then one can be said to be gambling. * If one always trades without knowing what the odds are, and if one doesn't care whether those odds are in ones favor or not, then one can be said to be very foolish. Choose your title well. Nuf said
yes it's gambling in practice. professional trader treat the market is one big casino...the market doesn't need your liquidity or your money..it' has the FED's money and HFT control the market. the stock market acts and has the property of a ponzi scheme. trading or daytrading has the properties of a gambling or blackjack. professional traders use th same risk/reward and odds like blackjack players do
It is not gambling because with trading there is a trending pattern that you study and pattern your decision with. And generally a calculated risk.