FAQ Is Trading the Same as Gambling?

[Splitlink]

Poker on the other hand and black jack is no different

No different from trading? Then trading is gambling.

 

[Christiaan]

Except with trading you are in complete control.You decide when and where you enter and exit a trade.We all get the exact same market it is only our approach to the market that differs.

With poker there is a great deal of luck involved.You cannot control the cards you or any of the other players get.With trading everybody get's the same price.Although there may be one or two games of luck that requires a drop of skill trading requires far greater skill.And that is only on the tecnical side.You also need true disicpline.

Obvoisly black jack and poker is nothing like trading.

I know my english is terrible.But english is my third language

 

[shadowninja]

Christiaan, as I see it, your English is better than many who hold a British passport and enjoyed a British education... but your understanding of trading, poker and gambling as concepts is wrong.

 

[DionysusToast]

If you go long an outright position - you are buying with the hope that someone else will buy it back off you at a higher price later on.

Isn't this the greater fool theory. You hope a greater fool will pay that higher price later on...

Value really has very little to do with price. Supply & demand does but then that's driven by people just like you, looking for the greater fool.

I certainly think it's a form of gambling but this could really just end up a semantical argument where people bash each other over the head with dictionaries.

I think the dicsussion here was a good one... http://www.trade2win.com/boards/general-trading-chat/85318-wall-street-casino-minus-sum-game.html

 

[Christiaan]

I do not think it matters at the end of the day.If i make money at the end of the day i'm either a sucessfull gambler or a sucessfull speculator.Does not change my account balance

 

[shadowninja]

I do not think it matters at the end of the day.If i make money at the end of the day i'm either a sucessfull gambler or a sucessfull speculator.Does not change my account balance

Of course. I'm not criticising your trading ability. We're just arguing semantics and whether anyone thinks poker players, traders or "investors" are degenerate gamblers or not is irrelevant.

 

[forker]

It's a personal thing.. If you're a religious person you're everything but a gambler... As for me, I am 100% pure gambler..

 

[Emini-mouse]

getting back to the subject
blackjack is a more sure gamble than trading the markets

 

[shadowninja]

getting back to the subject
blackjack is a more sure gamble than trading the markets

The house always has the edge in Blackjack. The house does not have the edge in poker or trading if you know what you're doing.

It is all still gambling by definition of the word "gambling".

 

[HowardCohodas]

The house always has the edge in Blackjack. The house does not have the edge in poker or trading if you know what you're doing.

It is all still gambling by definition of the word "gambling".

Not since the early 1960s when Dr. Thorp wrote "Beat the Dealer." He eventually went on to make his fortune in trading.

 

[Masquerade]

The house always has the edge in Blackjack. The house does not have the edge in poker or trading if you know what you're doing.

It is all still gambling by definition of the word "gambling".

If you're playing poker against a casino the house does have an edge.

If you're playing poker against people/trading against people then you're not betting against the house. They're just taking a cut of you so it's kind of irrelevant.

 

[Masquerade]

getting back to the subject
blackjack is a more sure gamble than trading the markets

That's rubbish. You can't demonstrate the probability for taking a trade at price x and the % chance it will succeed. I on the other hand can demonstrate the probability you will win/lose/tie in blackjack. For many people they're better off playing blackjack.

 

[Christiaan]

Black jack...that is ****** riduculous .Trading is not anything like games of chance at all.If i can make money consistenly by gambling i would.Way more fun

 

[DionysusToast]

The house always has the edge in Blackjack. The house does not have the edge in poker or trading if you know what you're doing.

It is all still gambling by definition of the word "gambling".

Well - actually you should say... "The house always had the edge in Blackjack, if you don't count the cards, in which case you get thrown out of the casino."

I remember picking up my winnings at the Bookmakers in the High St, Alton Hants. I remember the bookies words as clear as if they were yesterday. "Well done, don't come back".

That's an edge you can't beat.

 

[Emini-mouse]

That's rubbish. You can't demonstrate the probability for taking a trade at price x and the % chance it will succeed. I on the other hand can demonstrate the probability you will win/lose/tie in blackjack. For many people they're better off playing blackjack.

With blackjack you can work out your exact edge using mathematics
With trading you rely on historic statistics

 

[Masquerade]

With blackjack you can work out your exact edge using mathematics
With trading you rely on historic statistics

So what you're saying is that you have no idea of the probability that a market will move in a given direction at a specified time?

Tell me....using your historic statistics of 2000-2006 of eur/usd, how would that have served you in the period of 2007-current? Chances are you'd have lost most, if not all basing your trades on those statistics. If you want to rely on historic statistics go study the horse form guide or analyse sports and bet on it.

 

[Splitlink]

I say that I might think that I have an idea, but the reality can be quite different.

Blackjack aside, I have thought about horses, although, I do nothing except the lottery outside of trading.

I think that a risk/reward ratio of 1:1 or 2:1 has a much better chance of success when trading any 2:1 bet on a horse but, of course, 20:1 on a horse is more likely than any 20:1 on a trade.

Does that mean that 1:1 or 2:1 ratios are the best way to go when trading?

 

[Masquerade]

sorry im confused if you are agreeing or disagreeing

If you rely on historic statistics they are only as valid till they're not. Hence in trading if you relied on historic statistics to base your decisions on you'd be gravely mistaken and would be better off applying it to something with less variables such as sports. You only have to look at what happened to the markets between 2007-current and can appreciate how some person who'd programmed the market stats from 2000-2006 would have got severely burnt.

 

[Masquerade]

I think that a risk/reward ratio of 1:1 or 2:1 has a much better chance of success when trading any 2:1 bet on a horse but, of course, 20:1 on a horse is more likely than any 20:1 on a trade.

Does that mean that 1:1 or 2:1 ratios are the best way to go when trading?

Your risk/reward is not the odds of the event occurring.

A horse that is 20-1 has a 5% chance of winning the race (assuming the bookmaker is efficiently priced.) A trade where you risk 1 to make 20 does not have a 5% chance of success. How you conclude that 20:1 on a horse is more likely than 20:1 on a trade perplexes me.

 

[SanMiguel]

nope trading the market takes skill and most important true disicipilne.The failure rate is incredible high because it's a tough business.

There is a word for it it is called speculation where you use a strategy to take high propablity trades.Gambling is way more fun than sitting in front of your screen for hours carefully choosing your trades using indicators based on math.Consider a sucessfull trader that let's say for example sake has a winning rate of 80%.

That means all things being equal you can say that everytime he enter a trade he has a 80% chance of making money.I think your odds with gambling should be about 50/50.

There is no game of chance that even slighty resembles trading.So my opion it is not gambling it is speculation and we are speculators.

I know my english is terrible but it is my third language

Poker is gambling but i has a skill element.
Trading is gambling by the same factor.

Anything involving money on an uncertain outcome is gambling but you shouldn;t have an issue with that. The real question is more about society's perception of gambling vs what you do to make money.