On the basis of your definition, one could argue that the owners and shareholders of the casinos and betting firms are just as much gamblers as the punters who frequent them. After all, they have no more control over the number or colour that the roulette ball lands on or which horse wins the next race than those placing the bets. Yet the casinos and betting shops manage to make money consistently - week in and week out.
They win by taking a mathematically-determined odds (commission) from every gamble the punters make, plus every penny of every losing bet. They have no need to gamble the odds are stacked in their favour. In poker they have a special name for this, it's called the Rake and is the amount of 'house' money taken out of every hand before winnings are paid out. This is exactly how trading the Forex works, traders also have a special name for it, we call it the Spread.
This is in stark contrast to the average 'gambler' (their customers) - who do the exact opposite. I may be wrong, but I suspect that most members will argue that the owners and shareholders are no more gamblers than anyone else in any other business, on the grounds that they have found an 'edge' and are able to exploit it repeatedly. Some T2W members believe that it is possible to do the same as traders, so that whilst every trader incurs some losses, over time they manage to come out ahead and their equity curve rises steadily and consistently.
I never said traders can't win over the short/long term, in-fact around 25% of all traders regularly make money trading, this means 75% are actual losers. This figure is sometimes misquoted as being 90-95% however this misrepresentation was spread by dodgy guru's who use it to attract noobs. The 90-95% figure actually came from a statement made on how many retail people could reasonably be expected to become rich from trading the markets.
What you are doing is taking an educated gamble, you have studied the markets and you hope the market follows your train of thought. If anyone had a true edge over the market they would be a billionaire in no time at all.
Hopefully this answers you question Tim, even if you disagree with me.
Fred
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Taking risks is essential; gambling is foolhardy.” German general Erwin Rommel
I never said traders can't win over the short/long term, in-fact around 25% of all traders regularly make money trading, this means 75% are actual losers. This figure is sometimes misquoted as being 90-95% however this misrepresentation was spread by dodgy guru's who use it to attract noobs. The 90-95% figure actually came from a statement made on how many retail people could reasonably be expected to become rich from trading the markets.
l
What you are doing is taking an educated gamble, you have studied the markets and you hope the market follows your train of thought. If anyone had a true edge over the market they would be a billionaire in no time at all.
As i said it depends on what you are trading and how you trade , for example someone is systematically bidding and offering on some markets aiming to catch the spread , that's not gambling that's trading.
And its not necessarily for this trader to become a billionaire in no time as you put it even if he has an edge , that's because of liquidity limitations , volume ... etc , not all strategies are compoundable.
Hi F, I understand what your saying mate, yes I agree you can control your future not by gambling but by reducing the risk to yourself.
I think most people confuse risk and probability with gambling but they are different. As you said "you risk your life walking onto a busy road", however you always have the ability negate this risk or the probability of being hit by simply stepping back on the pavement. When gambling you do not have this option you can only wait for the outcome and hope the cars miss you.
Fred
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Taking risks is essential; gambling is foolhardy.” German general Erwin Rommel
Hi Tar,
No it's gambling. The moment you or those on the opposite side of your trade have given over all control of the outcome leaving the result solely to chance, then that is the definition of "taking a gamble".
It doesn't have to be compoundable. If you really have an edge you simply increase your wager (trade) by using increased volume (leverage) and A viola you're rich!
Fred
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'Prop trading' is just a fancy term for banks gambling in the market for their own profit.
Matt Taibbi
There have been many studies into this area, that prove conclusively that the figure is nearer 25% to 30%. In fact some studies show a massive 41% of traders are regularly successful.
http://www.learntotradethemarket.co...are-your-chances-of-success-as-a-forex-trader
http://www.travismorien.com/FAQ/trading/futradersuccess.htm
Albeit you could claim they are not conclusive. In fact I doubt any report could ever be considered conclusive as the forex is to unregulated. However, they do support my position that the 90-95% figure is just an urban myth. But I'm not to proud to read any reports suggesting the figures are nearer your implied position.
Fred
I don't see any documented solid proof that 25% are consistent.
on the contrary we have a member here who is writing a book about retail fx based on data provided from many brokers which shows that less than 1% is profitable for 4 consecutive Q - or something like that - .
well i would have thought gambling is all about risk and probability
Spotting an obvious mispricing in long dates futures options or spit-second arbitrage across exchanges for a given instrument (or even front-running part of a large order that has been routed to multiple exchanges) is not an event for which the outcome is uncertain, quite the opposite as it’s a done deal/sure thing, as so could not be considered gambling.
Gambling is the staking of capital on an event for which the outcome in uncertain.
+1
Thats what i was talking about , surely not all trading strategies are considered gambling , i gave locals making markets as an example . Arbitrage is another example as well . These are just general examples , there may be some extra details for each category .
And here we come to the second part which is not all strategies are scalable or compoundable . The problem here is most who get engaged in these boards are MT4 forex traders , they think that trading is just whether to buy/sell a currency/index using market orders only , and because forex has huge liquidity so everything is compoundable just find a profitable strategy.
Here is a nice exhaustive piece on is trading gambling.
Is Trading Options Gambling by BinaryEX
The argument is ages old, and it depends on if you have made or lost money trading.