What are similarities between trading and gambling? | Forex Factory

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What are similarities between trading and gambling?

  • #1
  • First Post: Jul 27, 2012 9:13pm Jul 27, 2012 9:13pm
What are similarities between trading with gambling
also
what is the difference between trading with gambling

all comments are welcome

thank you
wen
  • #2
  • Jul 28, 2012 6:19am Jul 28, 2012 6:19am
LETS LOOK AT THIS FROM OUR RETAIL PERSPECTIVE,

i would suggest that many that enter retail trading our infact quench ing ! there desire to gamble,under the pretence of speculation or even (investment)

in its pure form it is a bet,nothing more nothing less.and for that reason it captures such a large audiance.

personly i come from a semi profesisonal gambling back ground,which in some ways led me to trading.i believe initially it quenches that gambling desire,but eventually it becomes somthing more than gambling,it becomes a very serious occupation and very much buissness like.the risk becomes similar to that of the risk in any buissness endevior.and at this point you are no longer gambling.at this point you also realise that you are on the correct path !!!

if you study the forum,you can see this,just look at martingale ,every gamblers downfall.yet those that know,it can be defined as a holygrail.
  • #3
  • Jul 28, 2012 7:12pm Jul 28, 2012 7:12pm
Quoting diceman555
LETS LOOK AT THIS FROM OUR RETAIL PERSPECTIVE,

i would suggest that many that enter retail trading our infact quench ing ! there desire to gamble,under the pretence of speculation or even (investment)

in its pure form it is a bet,nothing more nothing less.and for that reason it captures such a large audiance.

personly i come from a semi profesisonal gambling back ground,which in some ways led me to trading.i believe initially it quenches that gambling desire,but eventually it becomes somthing more than gambling,it becomes a very serious occupation...

hi.. diceman555
thank you for the comment

is there any comment from the other ?

cheers
  • #4
  • Jul 28, 2012 9:27pm Jul 28, 2012 9:27pm
1 You can make of lose money.
2 You can win or lose.
3 Emotions are the same: greed and fear.
4 Although you think you can predict the outcome, you can't.
5 As long as you don't understand the market you are fighting the house.
6 The broker screws you with their spread just like the zero at roulette.
7 Trading has nothing to do with gambling but you can treat it in such a way that it can become gambling. When gambling the odds are predefined, when trading it's not althoug the market is the outcome of information and so long as nobody can predict the information coming out in other words the future nobody can make trading more preditable than gambling. Although the information can't be forecasted the outcome can be forecasted and in that way you can turn the odds in your favor.
  • #5
  • Edited 11:35pm Jul 28, 2012 11:23pm | Edited 11:35pm
Quoting wendykurnia
What are similarities between trading with gambling
also
what is the difference between trading with gambling

all comments are welcome

thank you
wen
What are similarities between trading with gambling?

 

  1. Uncertainty surrounding a speculative decision by traders/gamblers
  2. Quest for profit through speculation
  3. A market offered by market makers
  4. Speculators are price takers, rather than price makers
  5. Demand affects prices
  6. Demand is driven by risk/reward factors


what is the difference between trading with gambling

 

  1. The "event" is decided in trading by the traders
  2. The "event" time span is decided by the traders
  3. The "event" result is decided by the traders
  4. Money management is more flexible in trading, traders have more control over position sizing, profit taking, loss taking.
  5. Supply and demand controls prices in trading markets where as just demand will control prices in gambling;In traditional gambling there is no physical supply. There are financial instruments that share these characteristics but these instruments are derived from over markets that do have a supply.

    In summary I guess traders create their own events, where gamblers simply take and act on the events they are offered. That's all I can think of for now.

H.D
  • #6
  • Jul 29, 2012 8:33am Jul 29, 2012 8:33am
TraderDaily:How helpful are $250 forex mini-accounts and products like the CFD (Certificates For Difference) to individuals who hope to parlay a small amount of capital into a fortune? Are these valuable tools or just the malt liquor of the financial world?
Rotter: In my opinion, this is just a kind of gambling similar to online poker. I know some smart guys who consistently make money in online poker, just taking it from all the gamblers. If you are not just a gambler, you need some professional equipment like news feeds, etc., and then, with the right strategy, you might turn even a small amount into a fortune. The biggest problem with these products is that you do not trade on an exchange and it is not regulated. That means your counterparty is the broker who probably doesn’t even hedge your position. So, if you are too successful, the broker won’t like you, and kick you out or just not give you good fills. I’ve heard many stories like that. The broker is your counterparty; you must accept his prices and his fills. So, basically it is “malt liquor” for these brokers and not for the financial world. You definitely have much better chances playing online poker, as this is level playing field


Read more: http://www.traderdaily.com/08/insigh...#ixzz221Baguoh



HERES A SNIPPET FROM AN INTERVIEW FROM A FAMOUS TRADER REGARDING THE GAMBLING

TraderDaily:How helpful are $250 forex mini-accounts and products like the CFD (Certificates For Difference) to individuals who hope to parlay a small amount of capital into a fortune? Are these valuable tools or just the malt liquor of the financial world?
Rotter: In my opinion, this is just a kind of gambling similar to online poker. I know some smart guys who consistently make money in online poker, just taking it from all the gamblers. If you are not just a gambler, you need some professional equipment like news feeds, etc., and then, with the right strategy, you might turn even a small amount into a fortune. The biggest problem with these products is that you do not trade on an exchange and it is not regulated. That means your counterparty is the broker who probably doesn’t even hedge your position. So, if you are too successful, the broker won’t like you, and kick you out or just not give you good fills. I’ve heard many stories like that. The broker is your counterparty; you must accept his prices and his fills. So, basically it is “malt liquor” for these brokers and not for the financial world. You definitely have much better chances playing online poker, as this is level playing field


Read more: http://www.traderdaily.com/08/insight-from-the-flipper-catching-up-with-paul-ro

  • #7
  • Jul 29, 2012 8:37am Jul 29, 2012 8:37am
Playing poker you cannot see opponent's cards and opponent cannot see your cards. When trading you cannot see opponent's cards and opponent can see your cards
  • #8
  • Jul 29, 2012 9:04am Jul 29, 2012 9:04am
it is similliar but trading is The best Gambling , gambling only give double profit but Trading give Multiple profit , SL is our odd , with $10 Stoploss if we on correct entry could to be $100.
  • #9
  • Jul 29, 2012 9:05am Jul 29, 2012 9:05am
i come from a somwhat gambling background,

heres a system i trade on horse racing.

i only back odds on horses,that means any horse that the bookies have deemed below the 0 line,95 % of punters will not bet on odds on ,there priced out by the market.theres lies the simple edge,so i bet on every odds on ,the problem here is im risking more than i win,but my hit rate is extremly high,

so the pre martingale (which in maths and probability terms )is positive expectancy.the amount i need to increase after loosing races is using the bookies edge and the maths result in my winning edge.its that little calculation is what makes it work.



am i still gambling !
  • #10
  • Aug 2, 2012 10:52am Aug 2, 2012 10:52am
Quoting swingtraderf
1 You can make of lose money.
2 You can win or lose.
3 Emotions are the same: greed and fear.
4 Although you think you can predict the outcome, you can't.
5 As long as you don't understand the market you are fighting the house.
6 The broker screws you with their spread just like the zero at roulette.
7 Trading has nothing to do with gambling but you can treat it in such a way that it can become gambling. When gambling the odds are predefined, when trading it's not althoug the market is the outcome of information and so long as nobody can predict...
I appreciate your opinion,, swing trader

thank you
wen
  • #11
  • Aug 2, 2012 11:02am Aug 2, 2012 11:02am
Quoting diceman555
i come from a somwhat gambling background,

heres a system i trade on horse racing.

i only back odds on horses,that means any horse that the bookies have deemed below the 0 line,95 % of punters will not bet on odds on ,there priced out by the market.theres lies the simple edge,so i bet on every odds on ,the problem here is im risking more than i win,but my hit rate is extremly high,

so the pre martingale (which in maths and probability terms )is positive expectancy.the amount i need to increase after loosing races is using the bookies edge and...
apologies
i think you still gambling

thank you
wen
  • #12
  • Aug 2, 2012 11:45am Aug 2, 2012 11:45am
the biggest similarity I think that trading is a zero-sum game

you wont win from your buy unless bears are losing and vice versa just like gambling in a casino u wont win unless the house or other players lose
  • #13
  • Edited 1:24pm Aug 2, 2012 12:36pm | Edited 1:24pm
Quoting wendykurnia
What are similarities between trading with gambling
also
what is the difference between trading with gambling

all comments are welcome

thank you
wen
The difference is in the definition.

Trading: The action of buying and selling goods and services.
Gambling: An act of gambling; an enterprise undertaken or attempted with a risk of loss and a chance of profit or success.

Different words to say the same thing. While gambling may not be trading, trading is definately gambling. Although the definition may not state it directly, it's a well known fact that if you are trading then your goal is either profit or success. In the case of a non-profit trading organization you measure your success by the impact of your services.

When it comes to financial instruments it would be best to consider your trading to be gambling. Thats all it is. A chance for a profit and a chance for a loss. Some things have a higher chance to happen than others, and other things can payout much more than risked and the opposite is true as well.
  • #14
  • Aug 3, 2012 9:49am Aug 3, 2012 9:49am
Quoting Good Lookin
The difference is in the definition.

Trading: The action of buying and selling goods and services.
Gambling: An act of gambling; an enterprise undertaken or attempted with a risk of loss and a chance of profit or success.

Different words to say the same thing. While gambling may not be trading, trading is definately gambling. Although the definition may not state it directly, it's a well known fact that if you are trading then your goal is either profit or success. In the case of a non-profit trading organization you measure your...
hey. good lookin
agree

is there any other comment ?

thank you
wen
  • #15
  • Aug 3, 2012 10:10am Aug 3, 2012 10:10am
Quoting wendykurnia
What are similarities between trading with gambling
also
what is the difference between trading with gambling

all comments are welcome

thank you
wen
similar: easy to lose money, sucks in delusional persons,
addictive,

different: skill equates profit

of course there are different categories of gambling, in some (poker) skill will increase chance of winning.
  • #16
  • Aug 3, 2012 11:17am Aug 3, 2012 11:17am
Quoting wendykurnia
apologies
i think you still gambling

thank you
wen
UM, in real terms what ever we call it,its a bet,we can never know the outcome when placing that given trade,yes some have an edge and mm technique,but its a bet.

most books ive read by famous traders also refer to a trade as a bet.!

heres an old trading video of a barclays trading desk ,gambling on the outcome of news
Inserted Video
  • #17
  • Aug 3, 2012 2:27pm Aug 3, 2012 2:27pm
All casino games have built-in edges which favor the house. Trading is more flexible, allowing traders to find/create edges. Whether placing a bet on casino game or sending an order to your broker, both are considered a gamble. The difference is trading allows more options for a person to create more calculated risks.
  • #18
  • Aug 3, 2012 7:43pm Aug 3, 2012 7:43pm
Quoting stimuls
All casino games have built-in edges which favor the house. Trading is more flexible, allowing traders to find/create edges. Whether placing a bet on casino game or sending an order to your broker, both are considered a gamble. The difference is trading allows more options for a person to create more calculated risks.
i do agree with you,but there very much the same thing,especially in ones early days of trading.they are based on the same maths as any other casino,the bucket shop dosnt need to cheat you,it has a margin of not mathamatically losing.if we dont understand that basic principle then we are destined to eventually lose.the edge we all talk about is some what questionable over a realistic sample size,

im taking the conversation away from the op,s original point,every trade is a bet,and yes we can make a more calculated decision on risk,very much like my horse racing analogy,odds on is our edge,similar to the previous candles high ,until broken should indicate shorts,still a bet but a more realistic informed bet !
  • #19
  • Aug 4, 2012 3:38am Aug 4, 2012 3:38am
Make money over time: you are a trader
lose money over time: you are a gambler.
  • #20
  • Aug 4, 2012 3:54am Aug 4, 2012 3:54am
Quoting Mingary
Make money over time: you are a trader
lose money over time: you are a gambler.
exactly,95 % are gambling.so the conclusion being trading is gambling
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