Is Trading like Gambling?

Discussion in 'Psychology' started by scalpmaster, Oct 18, 2006.

Is trading like gambling

  1. Yes, every moment in time is independent

    15 vote(s)
  2. Maybe, depending on the method used

    27 vote(s)
  3. Sometimes, when i win it's not!

    2 vote(s)
  4. No, I can cut my losses slowly

    11 vote(s)
  1. You have absolutely no idea what you are taking about.

    There is no chance that you are a successful trader...
    So why are you starting threads at ET and wasting everyone's time?

    Rockfish is The Man.
    #21     Oct 19, 2006
  2. fletch2


    Except that I've heard countless people call startups and other uncertain business ventures a "gamble." Which of course, they are.

    #22     Oct 19, 2006
  3. Uncertainty is not necessarily gambling. If there is zero certainty it is gambling. If I have the ability to run a business for someone else I would have the same ability to run it for myself. Favorably measured risk is not gambling.

    That would be the same as saying the casino's are gambling. No, they are not gambling. They have the odds on their side and they know they will win just as I knew I would be successful in my own company.
    #23     Oct 19, 2006
  4. As I said, this thread shows some "successful" traders still need a course in common sense.
    #24     Oct 19, 2006
  5. If every trader in the world suffered from anterograde amnesia from one second to the next, then yes, you could probably make the case that each moment is independent from the next. Otherwise it's a pretty useless assumption for the markets.

    The one game conventional casinos offer that can hold an edge for the player (if only temporarily) against the house is blackjack -- it's not a coincidence that it's the only table game with "memory".
    #25     Oct 19, 2006
  6. fletch2


    A casino's risk is diversified away by running hundreds or thousands of games simultaneously and keeping a deep bankroll. In any given game, they are certainly gambling against a patron. In aggregate, it is not much of a gamble.

    I am not going to bicker and argue over what is clearly a matter of degree. Trading as the vast majority engage in it is high risk wagering on uncertain outcomes, and that, by definition, is gambling. Over and out.

    #26     Oct 19, 2006
  7. This is how I see it.

    Gambling is taking on artificial risk that was created for the sake of entertainment.

    Trading is taking on risk that occurs as a result of everyday business transactions.

    To me there is more than enough "natural risk" in the world that there is no need for gambling. The world would be a better place if all the money waged in casinos was betting that you wouldn't crash you car instead of on what card will turn up next.
    #27     Oct 19, 2006
  8. I am glad there are some sensible coments and opinions.

    What I am really interested is to discuss concepts on
    gaming/gambling theories implemented in trading systems.

    Methods of risk control/money management used in gambling that can also be applied in trading.

    Expectancy in gambling is <0
    How do you make expectancy in trading less of a variable?
    #28     Oct 19, 2006
  9. me1969


    When you are gambling you have a singular event. You put your chips on the table and then the game is made. Won or lost. Trading is more a continuum. You have to decide when it is over. This makes it quit more difficult and easier to loose a lot. You have not only to enter the game, you have also to exit (with a gain or loss). Quite a difference in my opinion.
    #29     Oct 19, 2006
  10. BlackJack and poker allows you to cut loss or continue.
    Roulette does not.

    But methods of controlling risk/money management have been implemented in these games too.

    For trading, you should have a stop loss level before even entering the trade otherwise this continuum would be severly
    distrupted by economic data/news(singular event).
    #30     Oct 19, 2006