Soc, i think you have misinterpereted some of my replies, FWIW, i have absolutely nothing against you, not that you would be bothered anyway, infact, we may be on the same wavelength( bold statement, i know), the only thing i think we differ on is the money aspect. But hey! nothings ever black and white. Hope this clears the air!
SOCRATES
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Gambling is not Trading and Trading is not Gambling.
Money management cannot efficiently be applied to gambling in the strictest sense of the phrase.
Money management must he applied to anything else where an outcome can be forseen in advance and preparation made on committment in order to mitigate the effects and limit the damage in the event that the outcome that develops is not the one expected.
Therefore these are two very different things, but I will concede that for people who treat Trading in a cavalier fashion it is as if it were Gambling, Wild Gambling.
Kind Regards As Usual.
Money management cannot efficiently be applied to gambling in the strictest sense of the phrase.
Money management must he applied to anything else where an outcome can be forseen in advance and preparation made on committment in order to mitigate the effects and limit the damage in the event that the outcome that develops is not the one expected.
Therefore these are two very different things, but I will concede that for people who treat Trading in a cavalier fashion it is as if it were Gambling, Wild Gambling.
Kind Regards As Usual.
SOCRATES
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I am willing to expand on this:~
In gambling all that is exposed is the bet, the stake. This stake or bet is a limited amount and that's it.
In trading there is an unfolding scenario which is the opposite, because what is at risk is much more.
Therefore to mitigate the effects and limit damage it must be treated as if the stake itself is limited, and not otherwise.
This is why the use of stops is crucial in trading, whereas in gambling the use of stops is not and cannot be applicable, except to stop the act of gambling itself either on the spot or the continuation thereof.
Kind Regards As Usual.
In gambling all that is exposed is the bet, the stake. This stake or bet is a limited amount and that's it.
In trading there is an unfolding scenario which is the opposite, because what is at risk is much more.
Therefore to mitigate the effects and limit damage it must be treated as if the stake itself is limited, and not otherwise.
This is why the use of stops is crucial in trading, whereas in gambling the use of stops is not and cannot be applicable, except to stop the act of gambling itself either on the spot or the continuation thereof.
Kind Regards As Usual.
frugi
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Hi Soc,
If I have an excellent knowledge of the conditional and other probabiliites involved in a game of poker between x people and correctly apply money management according to my interpretation of these probabilites as they unfold, and this positive expectancy causes me to win over time, would you call me a gambler?
Trading is gambling in my opinion as one is simply betting on an uncertain outcome, in both cases, but the word carries no negative connotations as far as I'm concerned. A trade with a stop loss in the market is very similar to a fixed stake, imho, indeed I see trading as making a series of fixed stake bets, each one taken at a different time as the odds (as I see them) are kind enough temporarily to fluctuate sufficiently in my favour. Once I have bet, however, the win is of course unknown until the trade is closed, and in this respect traditional gambling diverges considerably from trading.
The only gambler who is bound to lose is one who plays for a long time against a house with a fixed edge, as in a casino.
Forgive my pomposity 🙂
If I have an excellent knowledge of the conditional and other probabiliites involved in a game of poker between x people and correctly apply money management according to my interpretation of these probabilites as they unfold, and this positive expectancy causes me to win over time, would you call me a gambler?
Trading is gambling in my opinion as one is simply betting on an uncertain outcome, in both cases, but the word carries no negative connotations as far as I'm concerned. A trade with a stop loss in the market is very similar to a fixed stake, imho, indeed I see trading as making a series of fixed stake bets, each one taken at a different time as the odds (as I see them) are kind enough temporarily to fluctuate sufficiently in my favour. Once I have bet, however, the win is of course unknown until the trade is closed, and in this respect traditional gambling diverges considerably from trading.
The only gambler who is bound to lose is one who plays for a long time against a house with a fixed edge, as in a casino.
Forgive my pomposity 🙂
SOCRATES
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No, certainly not. I would define you as a skilled poker player, which is a very different proposition.frugi said:
Therefore the people playing against you would be gambling, but strictly speaking not you, as you would have an edge as a consequence of skill, that your opponents would not have.
This is without even considering the use of a strategy, which is a planned method of achieving some objective, regardless of risk whether real or implied.
These are according to military principles in dealing with tactical decisions dependent upon conditions of uncertainty.
Kind Regrds As Usual.
SOCRATES
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I had forgotten to mention that within a strategy, there has to be included pre conceived tactics. These are preparations made in advance and held back, and used to deal with the unforseen.
The strategy deals with the rest of the problem as a separate issue, but not entirely disconnected from it. Therefore the better the strategy, the better its chance of success in a competitive environment, whether peaceful or warlike.
Kind Regards As Usual.
The strategy deals with the rest of the problem as a separate issue, but not entirely disconnected from it. Therefore the better the strategy, the better its chance of success in a competitive environment, whether peaceful or warlike.
Kind Regards As Usual.
SOCRATES
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Provided that for every corresponding buyer there is a corresponding seller which is the ideal condition, or rather that willing buyers and sellers are equally matched.
If there are, you have a liquid and tradeable market and if not you have an illiquid and potentially lethal market.
If there are, you have a liquid and tradeable market and if not you have an illiquid and potentially lethal market.
SOCRATES
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No, you think in advance of taking a position and make yourself ready to cope with an outcome you do not expect, in order to maximise your advantage through correct timing and accurate entry, whereas what I talk about in the post above is something different. It is about liquidity, and not about the push pull effect of supply and demand which is something altogether different.
SOCRATES
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Ok., I will expand further, supply and demand is the cause that drives prices up or down, whereas liquidity is a condition that guarantees you will find a buyer for that which you have to sell or a seller for that which you want to buy, without delay, let or hindrance of any sort.
SOCRATES
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Ok, I will expand even further. Supply and demand are separate to liquidity. But in an ideal tradeable market both must be present, in harmony at the same time in order for you to benefit, either long or short.
This concept is not universally understood. It can cause untold grief.
I hope this clarifies the issue.
This concept is not universally understood. It can cause untold grief.
I hope this clarifies the issue.
SOCRATES
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What I am saying is that you must procure to refine your timing, your entry point, you must prepare your stop in advance of committing, in order to ensure (assuming that you know what you are doing and that your assesment is correct) that if suddenly circumstances, for whatever reason turn against you that the damage you will suffer will be minimal.RUDEBOY said:
The object of the excercise, the repeated excercise is to get it consistently right and not consistently wrong and not to be tempted to take flyers, which is real gambling.
SOCRATES
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No, what you need to have is a complete understanding of what you are in and not a perception.RUDEBOY said:
NO market is foolproof, otherwise automated trading would have been here for yonks and none of us would have to apply any brainwork to this, but you need to participate in a liquid market to ensure you get filled, accurately, correctly and on time.
counter_violent
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But even more important than that, is for the trader to act within a framework of morality and utilising a structure of logical deduction and reasoning and, furthermore a totally adult attitude of being able to be totally responsible for his own very actions, and the development of the ability to accept and not to try to force.
Where is the morality in trading when we have a sept 11th type event ?
Where is the morality in trading when we have a sept 11th type event ?
SOCRATES
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How is Sept 11th related to trading, may I ask ? Sept 11th was the result of an act of terrorism.
Trading did not cause Sept 11th to occur. But Sept 11th created conditions for the market, which incidentally was already very weak to be driven down further. Skilled traders took advantage of the fall in price and its subsequent rise without hesitating. Is that what you mean?
Skilled traders cannot be blamed for what happened only for seeing an opportunity in a sharp selloff followed by a steep rise. There is nothing immoral in that, but an opportunity to take advantage of market action.Doing that is not immoral.
It would have been immoral to cause Sept11th in order to make the market drop and then rise, which was not the case at all, except if you can see in it something I do not.
Kind Regards. That's it, I'm off to bed.
Trading did not cause Sept 11th to occur. But Sept 11th created conditions for the market, which incidentally was already very weak to be driven down further. Skilled traders took advantage of the fall in price and its subsequent rise without hesitating. Is that what you mean?
Skilled traders cannot be blamed for what happened only for seeing an opportunity in a sharp selloff followed by a steep rise. There is nothing immoral in that, but an opportunity to take advantage of market action.Doing that is not immoral.
It would have been immoral to cause Sept11th in order to make the market drop and then rise, which was not the case at all, except if you can see in it something I do not.
Kind Regards. That's it, I'm off to bed.
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