What if?

[peakoil]

So, only 1 in five people consistently make money at financial spread betting. How terrible. How very terrible, and you think about that, and you think some more, and then it suddenly...

It suddenly strikes you - as only an epiphany can:

What other form of gambling, of all the forms of organized gambling you could possibly think of, comes even remotely close to a ratio of "one in five people" walking away, year in year out, as a consistent winner?

Poker? Blackjack? Football betting? Baccarat?

Really? Are you sure about that!? Are you?

Look to the facts please.

Because if you look long enough into the facts -

You might just find, for example, that your chances of being a consistent winner at financial spread betting are about twice your chances of being a consistent winner at the very next best form of gambling (ratio of winners - approx 1:10) - and that's also, once you become skilled at that, which also takes many, many, many years of learning all the nuances of the game.

In other words, you tell us which form of organized gambling, gives any one of us a greater than 1 in 5 chance of being a consistent winner and I won't be the only one who would start to lose interest in financial spread betting.

So... now, the 'what if' question:

What if, pressure is being put on a certain regulatory body, to try and bring the numbers of consistent winners ...'more into line', with all other forms of gambling (and for obvious reasons)?

 

[sminicooper]

So, only 1 in five people consistently make money at financial spread betting. How terrible. How very terrible, and you think about that, and you think some more, and then it suddenly...

It suddenly strikes you - as only an epiphany can:

What other form of gambling, of all the forms of organized gambling you could possibly think of, comes even remotely close to a ratio of "one in five people" walking away, year in year out, as a consistent winner?

Poker? Blackjack? Football betting? Baccarat?

Really? Are you sure about that!? Are you?

Look to the facts please.

Because if you look long enough into the facts -

You might just find, for example, that your chances of being a consistent winner at financial spread betting are about twice your chances of being a consistent winner at the very next best form of gambling (ratio of winners - approx 1:10) - and that's also, once you become skilled at that, which also takes many, many, many years of learning all the nuances of the game.

In other words, you tell us which form of organized gambling, gives any one of us a greater than 1 in 5 chance of being a consistent winner and I won't be the only one who would start to lose interest in financial spread betting.

So... now, the 'what if' question:

What if, pressure is being put on a certain regulatory body, to try and bring the numbers of consistent winners ...'more into line', with all other forms of gambling (and for obvious reasons)?

Interesting thoughts and comparisons - perhaps the inherent upward trend of the markets provides an overall significant positive bias in comparison to regular forms of betting? But despite the spread betting nomenclature could it not be that the 1 in 5 profitables are probably trading successfully rather than gambling, and that the 80% losing majority are the gamblers (or just poor traders)?

As for the mooted regulatory changes – I suspect that profitable traders will go on being profitable and the losers will just die slightly more slowly.

 

[peakoil]

Thank you for saying so.

If we could accept that betting on the market is as close to betting on a 50/50 event that organized betting gets. Then, given enough learning experience, the difference between an unskilled participant and his counterpart, is most simply down to timing. The 1 in 5 person is still gambling but with a skill that gives him an edge over most.

I might add, having pored through their accompanying literature (which supports their proposed changes) that, detailed as it was, I still found it far more interesting for what it left out, than for what it included - to advance their argument... ;-)

EDITED to say - even if winners will still be winners, we have to remember that to maintain the same r/r ratios, the 'lucky & skilled ones' would need more 'parking space' in 'the account'. Not everyone (by any means), of those 1 in 5, can easily accommodate the necessary multiple of funds to do just that. Hence the proposals would have a negative net effect on winners, rather than existing to reduce the number of losers. Besides, try walking into any high street bank with, for example(!), 3-5+ years of consistent spread bet wins, and a hungry for parking space look, the conversation, once the pleasantries were dispensed, would surely include: "...well, if only you'd asked me for 25K for a wedding, that'd be no problem. But we can't... Etc"

 

[sminicooper]

Thank you for saying so.

If we could accept that betting on the market is as close to betting on a 50/50 event that organized betting gets. Then, given enough learning experience, the difference between an unskilled participant and his counterpart, is most simply down to timing. The 1 in 5 person is still gambling but with a skill that gives him an edge over most.

I might add, having pored through their accompanying literature (which supports their proposed changes) that, detailed as it was, I still found it far more interesting for what it left out, than for what it included - to advance their argument... ;-)

But I don't necessarily agree that the 1 in 5 person is gambling. E.g. if I take a trade it will be because I think (after due consideration and calculation) it's going to be profitable – I don't believe that gambling (in any format) would work for me and I don't consider any of my trades to be gambling: they are just an exercise in probability as far as I'm concerned (though I do realise that some sophisticated gambling with which I'm not familiar might have a probability consideration). It's just that SB is a convenient vehicle for my purposes – would I be considered to be gambling if I placed exactly the same trade through a conventional broker?

I'm quite happy with the way things are without further regulatory interference (but then I would be wouldn't I, since the other 80% are keeping the company going that allows me to trade profitably). In essence I'm quite cynical about the proposed changes (but to be fair I haven't had the time or inclination to read all the small print) – in the end, the ignorant/stupid/incompetent are unlikely to be protected against themselves by regulation; and increasing the burden on already "heavily leaned-upon" companies will just make life more difficult I suspect. As far as I'm concerned the system ain't broke but meddling politicians are determined to fix it.