FAQ Is Trading the Same as Gambling?

[Christiaan]

tecnical analysis is a science and this science is older than either of us.There is risk but that is why it is called speculation.

How can you compare one's ability to bluff with carefully choosing trades trades employing this age old science which is far more complex than a mere card game.

 

[SanMiguel]

tecnical analysis is a science and this science is older than either of us.There is risk but that is why it is called speculation.

How can you compare one's ability to bluff with carefully choosing trades trades employing this age old science which is far more complex than a mere card game.

poker is not all about bluffing. In fact, bluffing is probbaly less than 10% of the game.
Some would say TA is a religion.
Anything with money on the line with an uncertain outcome is gambling.
Your misunderstanding of poker is the same way people misunderstand trading.

 

[Christiaan]

i must admit i know nothing of poker.Still it is only a card game.There is a risk in trading but then there is also risk in investing.

Then investing is also gambling?

 

[SanMiguel]

i must admit i know nothing of poker.Still it is only a card game.There is a risk in trading but then there is also risk in investing.

Then investing is also gambling?

some could say trading is only trading
Personally, I think investing is an old fashioned term used mainly in regards to buying houses or stocks where people were used to the phrase "the price always goes up". The price quite clearly does not always go up, you could for example buy a house and have the price go down so it is open to risk and therefore your money is still on the line.

IMO, gambling, trading, investing are all just societal words for the same thing of which some have been more accepted than others and some have more skill than others.
If you played chess for money, what would that be? Backgammon is a skill game too.

 

[Splitlink]

tecnical analysis is a science and this science is older than either of us.There is risk but that is why it is called speculation.

How can you compare one's ability to bluff with carefully choosing trades trades employing this age old science which is far more complex than a mere card game.

I do not think that TA is a science. It is more of an art ie. a skill.

What I am looking at, right now, is the formation of a price pattern. I do not know how it is going to end. I have placed stops in case my assumption is contrary to what will happen. There is nothing scientific about it because price patterns are only correct afterwards. As far as I am concerned, they are no good to me, then, and I act while they are forming. By getting into a short trade near the top I get a risk/reward factor that I like, in preference to waiting for a breakout.

Card games are the same. Who knows what the the other players are holding? That is the object of the game. A skilled poker player probably uses his reputation to instill fear into his opponents and to make them quit early ! I don't play card games so don't really know.

 

[meanreversion]

"Investing" means buying a house or a stock in the assumption it must go up. This sort of activity is acceptable to society. "Gambling" means going to the casino or punting on the markets (long and short). An "investor" may be utterly clueless, whereas a "gambler" may have a positive expectancy system, but investors are always regarded more highly than gamblers. It's just semantics.

 

[Christiaan]

When you invest in something you also risk money do you not.You also risk money with trading.Then how can trading be considered gambling just because there is risk but investment not.Investing also carries risk that is why you pay people to do it for you.People who knows what they are doing.

No matter what you are investing in there is risk and because there is risk it too must be considerid gambling.

 

[SanMiguel]

When you invest in something you also risk money do you not.You also risk money with trading.Then how can trading be considered gambling just because there is risk but investment not.Investing also carries risk that is why you pay people to do it for you.People who knows what they are doing.

No matter what you are investing in there is risk and because there is risk it too must be considerid gambling.

Gambling is just a word.
Try calling it risk trading...or think or some other word that doesn;t have a link with societal values.

 

[SanMiguel]

yes i know but to compare it to a card game?That is riduculous

Why? It is all about playing your edge for cash.
What you think about a card game vs gambling is exactly what your average Joe Bloggs thinks about trading because they don;t understand the edge you are trying to exploit.

 

[robster970]

When you invest in something you also risk money do you not.You also risk money with trading.Then how can trading be considered gambling just because there is risk but investment not.Investing also carries risk that is why you pay people to do it for you.People who knows what they are doing.

No matter what you are investing in there is risk and because there is risk it too must be considerid gambling.

It's because people have been conditioned to associate 'investing' as being a good and clever thing to do whereas gambling has a societal conditioning associated with addiction, destruction and ruin.

It's how you manipulate a large number of people in one go - create associations with language. It's what advertising does to make the sheep do stuff.

 

[HowardCohodas]

Gambling is just a word.
Try calling it risk trading...or think or some other word that doesn;t have a link with societal values.

If the word in use doesn't matter, then there goes the multi-billion dollar industry that helps politicians choose the right words to use in their political dealings with their audience and against their opponents.

Of course the choice of word matters.

 

[SanMiguel]

If the word in use doesn't matter, then there goes the multi-billion dollar industry that helps politicians choose the right words to use in their political dealings with their audience and against their opponents.

Of course the choice of word matters.

I was kind of referring to the guy who seems to be struggling to come to terms with trading an edge because they think it might be gambling.

I meant on a personal level in this game/industry you have to treat it as an edge and that's why I don't care what it's called. Society can carry on doing what it needs to...

 

[TheBramble]

If you decided to open a retail outlet for designer shoes or luggage or build a factory to manufacture machine tooling for the petrochemical industry – would that be business or would it be gambling? Are they more ‘appropriate’ enterprises than trading? If you answered ‘yes’ then you’re in the wrong ‘business’.

Your success in any venture depends on the specific prognosis for your target market group, the geographical area within which you operate, the quality of the research you’ve done, your timing the people you involve in your enterprise, the backing both financial and political and commercial, your network (contacts) your passion for what you’re doing, the fundamental soundness of you operation, the country in which you decide to base it and the global economy with specific regard to your area of expertise. Amend definitions and terms and delete/add as appropriate for trading or whatever area of potential interest in which you are considering setting out to turn a profit.

Every endeavour is a gamble to the degree to which you haven’t covered all the bases.

You can never cover all the bases.

Everything is a gamble. Even crossing the street.

Only traders that haven’t figured the odds get sensitive about the use of the word gambling in relation to trading.

 

[Splitlink]

There is a book that I am trying to get through and, I must admit, there may be a bit of "generation gap" involved in why I cannot get my brain around all the author`s work..

It is called "For the Win" by Cory Doctorow. I hesitate to recommend it because, without doubt, it will not be to everyone's taste but, in between the bits about online gaming that I skim though, there are some very interesting arguments about economics and where all this is heading.

Any of us who uses a spreadbetting firm is gambling. That, whether we like it or not, involves a very large porcentage of the population. All we are doing is punting on rises and falls and the same can be said for for the trading houses. The whole capital market is tied to commodities that can not exist in the quantity in which they are traded. Indices are traded on the calculations of TA and billions are won and lost each day on the rises and falls. What would happen to the world if it were all to collapse? Nothing very much. Someone else would get rich, instead.

 

[dccruibay]

In gambling the rules of the game are defined, i.e. there's no model risk. Not so in asset pricing, and hence in trading... This is why gambling can be considered as a simple model of the market where all models are true models. So if you don't understand the gambling rules/risk/models - then don't think about trading too. I met so many situations when people are talking
about very sofisticated models, measures, bla, bla, bla and cannot solve the simplest probability riddle from the gambling world.

 

[theroguetrader]

gambling is a game of chance


trading is " lightyears " away from gambling



" Less is More " (Mies vander rohe)

 

[Truth Seeker]

In short Yes it's the same as same as gambling because the outcome of the trade/bet is not known and the only thing we can control is risk. It's just a more intelligent way of gambling, but is gambling never-the-less.

 

[flemming]

I used to argue vehemently my first couple years of trading that it was NOT gambling. However, after 15 years, I have come to the conclusion that is exactly like gambling.

However, you get to chose whether you are the weekend gambler who plays the tables where you do not have an edge unless you count cards at blackjack. Even then, you must play 10 hands at negative odds just to get 1 or 2 hands with a 55% probability. Or you can choose to play poker which is the only game in a casino where you truly can gain an edge since you are playing against other players and not the house.

It is gambling and the same reason most gamblers lose is the same reason most traders lose. And the same reasons why professional gamblers gain is the same reason professional traders win. Having an edge, risk management and money management

 

[Successful_Trader]

Trading is not the same as gambling... a dumbass can make money gambling on a fluke, but to be a profitable trader long-term it's not a one- or two-time thing... you actually have to have a tested strategy and execute it well. In short, you gotta know what you're doing... Definitely this is much more serious than gambling.

 

[Jimmy Lulz]

It's all gambling. Everything you do.

In the end, life is gambling. Try to do some good, have some fun and make someone happy before you cash out.

That's it.