With trading you can stop the outcome of an "event" at any time. Stop loss if you're wrong and take profits if you're winning.
So how is this not gambling?
With trading you can stop the outcome of an "event" at any time. Stop loss if you're wrong and take profits if you're winning.
So how is this not gambling?
Very true but end of the day you stand a better chance in trading.
Nobody can literally prove this but I'm certain the number of successful traders by far exceeds the number of successful spreadbetters.
What is the difference between a spreadbetter and a trader???
There is no evidence to suggest financial trader's are more successful than sport traders. I actually remember reading that 90% of traders loose money, a statistic that is hard to beat...
JK
sorry mistype, I meant sports betters not spread betters.What is the difference between a spreadbetter and a trader???
I wonder what the statistic with sports betting is. Wouldnt be surprised if its 100%There is no evidence to suggest financial trader's are more successful than sport traders. I actually remember reading that 90% of traders loose money, a statistic that is hard to beat... JK
Of course I myself do both and personally find it impossible to consistently profit with sports.
I am not debating the trading/gambling analogy. I agree with you.Perhaps this is because you don't 'know your market' when betting on sports. I trade fx mainly but am happy to call myself a (part time) gambler - it is what it is.
If you know more about football than you do about the financial markets then I would BET on you being more profitable with your sports betting - or very lucky with up/down financial bet's.
JK
I am not debating the trading/gambling analogy. I agree with you.
You are wrong on the second point. I know alot about my football and in fact know very little about financials. But still I have better returns on financials.
To put it another way, an individual trade for me is something that has an uncertain outcome. That is undoubtedly a gamble. However, I don't think in terms of individual trades; unless you have a strike rate of 100% you have absolutely no way of knowing in advance which trades will be the winners and which will be the losers.
Therefore I only think in terms of a sample of X trades which over time will result in a profit. I believe my system will produce an overall profit every single time over a sample of X trades.
If I cherry-pick and only take 25% of the entries my system produces within that sample of X trades, then I am gambling because I am introducing a chance factor and not playing the probabilities correctly. If I take 100% of the entries, then based on the historical evidence, which at the end of the day is all I have to go on, I'm not gambling.
You may say that past performance is no guarantee of future performance etc and that therefore I am gambling; and you may be right, but I personally can't think like that because if I did I'd either not trade at all or I'd sit here flipping coins all day long
So trading, not being gambling, is based on whats happened before, yeh?
Is this a guarantee for the future?
Did you read the whole post? :cheesy:
Are you a gambler?
I know alot of sports betters. I am yet to meet one person to claim he/she can profit consistently from sports.
Taking directional bets at highstreet bookie based on some 'tip' or news is unlikely to work in the long term.
If you know the probability of winning/losing before you trade - you are a trader - not a gambler...
If you have to think about probability (the chance of a future event occurring) you are a gambler and trading falls into that 'gambling' bracket.
It doesn't matter how confident we are that our trades are going to be in the money, it is a calculated risk - just as a sports gambler would take calculated risks.
Look back at my roulette wheel analogy in the first post.
It is totally understandable that people who devote every working day to trading in the financial markets don't want to be classified as gamblers.
The markets are a force with so many factors affecting them, if betting on football you may just look at the injury list. So it is without doubt a more intellectually challenging and interesting form of speculation.
Im off to study cable form and plan for the week ahead!
JK
Hello JK,
My point was, that if you backtest your algorithm/stragegy on historical data, and papertrade for a period, then the propability of winning during trading on a real account is - theoretically - the same as during backtesting and papertrading.
Thus - knowing the propability, you know before you start risking your money how your trading will perform. If so - its not gambling any more, but trading using a calculated risk.
My point was, that if you backtest your algorithm/stragegy on historical data, and papertrade for a period, then the propability of winning during trading on a real account is - theoretically - the same as during backtesting and papertrading.
Thus - knowing the propability, you know before you start risking your money how your trading will perform. If so - its not gambling any more, but trading using a calculated risk.