In a good book "Risk-Reward", the author Howard Abell distinguishes between the traits of gamblers and calculated risk-takers. "More than ever you need to understand the difference between a gamble, which has a high probability of loss, and a calculated risk, which has a much higher probability of a positive outcome. Here are the traits and tendencies of gamblers from calculated risk takers. The following lists contrast the two groups. The gambler Motivation derived form desire for excitement and danger Crowd driven Highly emotional Blames others or luck for bad outcomes Lingers over losing choices and wins not taken Is influenced by unacknowledged fantasies to what is possible Will risk more than can afford to lose Acts on impulsive decisions Is unaware of unconscious motivation Acts out of sense of superiority or "magical thinking" Gets high and feels powerful on a win, gets low and feels worthless and small on a loss Infuses ego into risk choices Lacks discipline and invests on wishful fantasy rather than recognizing reality Hides losses and is secretive about taking chances Procrastinates (building up excitement levels) Follows a favorite method no longer useful or relevant When losing will take increasingly bigger risks to catch up Looks for the one big win or score that will result in bliss The calculated risk taker Contains and manages emotion Is aware of irrational factors swaying a crowd Takes responsibly for results Does not waste time with what might have been Acknowledges personal fantasies and resolves or disregards them Risks a tiny fraction of equity on any individual choice Concentrates on a realistic long-term strategy Knows personal abilities and limitations Is hardworking and open to new ideas Stays emotionally even during wins and losses Easily resists risk that do not fit within defined risk limitations Is open about risk taking Proceeds in a serious, conscious manner Stays alert to present trends Follows predetermined guidelines of safety Analyzes situation, observes own reactions, and makes realistic plans The following list represents the market behaviors that prevent most traders from achieving the results they desire in the marketplace. How many of these 10 are you struggling to overcome? Not defining a loss Getting locked into a belief or magical thinking Losing control of a trade or opportunity Emotional trading or investing Hesitating or procrastinating about a market opportunity Loss of focus Being more invested in being right than in having a successful outcome Not consistently applying your trading system Not having a well-defined money management system Not being in the right state of mind" http://www.go2cio.com/chetan/gamblers.htm