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. So accepting a 6/5 payout on black and red is a bad deal ? It is not an arbitrage , you can lose a few ( many ) games in the row .
    #51     Oct 20, 2006
  2. I don't understand your comment, but if you're referring to Russian roulette, you can only lose once and it has nothing to do with arbitrage.
    #52     Oct 20, 2006
  3. ^^^^^^


    Actually, I consider the expectation of a lottery bet to be positive.
    Here is why:
    I consider $1.00 as meaningless or zero (0). I consider $10,000,000 as meaningful and at face value. If the odds of winning are 1 in 10,000,000 then the expectation for that lottery is as follows :

    10,000,000 :1 * $0 = 0 expected loss

    1:10,000,000 * $10,000,000 = 1.00 expected win

    total expectation $1.0

    I would frequently bet $1.00 to win a meaningful sum since I consider the value adjusted expectation to be positive.
    #53     Oct 20, 2006
  4. In the dim recesses of my mind I remember an article written by Milton Friedman and Jimmie Savage trying to explain choices involving risk by comparing the utility of insurance vs. purchasing a lottery ticket. I remember NO details but I seem to recall that under their analysis that purchasing a lottery ticket can be rational.
    #54     Oct 20, 2006
  5. what Russian roulette ? I asked you if you think 6/5 payoff on even odds ( risk arbs) is a good deal , even if it's not an arbitrage per se.
    Is it ?
    #55     Oct 20, 2006
  6. ^^^^^^


    I believe my example explains all small losing retail trading along with low wager Vegas gambling. Although strictly speaking ( without adjustment for value to the individual) it is a negative expectation foray, after value adjustment for the worth of the possible outcomes versus worth of the possible loss they become rational and positive expectation activities.

    And as you mention, with the exception of government mandated insurance, the general propensity of consumers to take negative expectation bets on insured outcomes is explained thereby as well.
    #56     Oct 20, 2006
  7. 1000


    You mean like this...

    I think it is possible to day trade successfully and be profitable. Just my opinion.
    #57     Oct 20, 2006
  8. trading is not gambling if your trades are +EV
    #58     Oct 21, 2006
  9. tszpara


    Actually I think both are very much like each other.

    You need a strategy to win.
    You need to stick with your strategy and not play your hunches.
    Money management is key. You can't overbet your bankroll.

    I watched a guy the other day playing blackjack who chose not to split his aces. (Basic strategy says you should split) I asked him why and his answer was that he didn't want to risk $600.00. I replied so how much are you down. He said $1200. So if you played your cards right you could have one back 1/2 of your losses on one hand.

    People get scared or greedy in both and deviate from a winning strategy.
    #59     Oct 24, 2006
  10. ofcourse it depends upon the methods..
    how do u use and invest your money.....
    #60     Oct 26, 2006