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What are similarities between trading and gambling?

  • #101
  • Aug 17, 2012 6:46pm Aug 17, 2012 6:46pm
Trade the News -is gambling or not ?

Inserted Video
  • #102
  • Aug 17, 2012 7:46pm Aug 17, 2012 7:46pm
Quoting wendykurnia
wow,, very interesting,,,

and I strongly believe that Don Johnson
if willing to learn forex trading
almost certainly he would be a brilliant trader
Actually, what Mr Johnson did wasn't that clever, at least mathematically; it seems that he simply negotiated with a casino to offer him a positive expectancy game. Hence anybody who used a tight strategy and MM would eventually win, under those playing conditions. So either the casino was gullible, or (as the article states) they intended to use a high roller like him to promote the game, and rejuvenate their flagging business, and were willing to suffer some losses as some kind of marketing expense.

Obviously what made Mr Johnson's feat newsworthy was the amount of money that he won, and the fact that other casinos banned him. But (and as any savvy forex trader knows) if you're going to employ prudent MM, you'd need several times that amount of money to start with, and slowly grind out the fortune from your low risk per hand. Either that, or Mr Johnson took undue risk and simply got lucky.

In addition to skills in MM math, and discipline, forex requires a comprehensive understanding of market behavior. For any professional gambler, however successful, to make the move to forex, there is a significant learning curve involved.
  • #103
  • Aug 17, 2012 7:57pm Aug 17, 2012 7:57pm
Quoting hanover
Actually, what Mr Johnson did wasn't that clever,
Yeah, he was already a wealthy man. Just happened to make a few extra million by playing when he believed the odds were in his favor. Just your ordinary, run-of-the-mill dumb ass I suppose.
When the Joker is in the deck.. fear not and play it well
  • #104
  • Aug 17, 2012 8:11pm Aug 17, 2012 8:11pm
Quoting hanover
Actually, what Mr Johnson did wasn't that clever, at least mathematically; it seems that he simply negotiated with a casino to offer him a positive expectancy game. Hence anybody who used a tight strategy and MM would eventually win, under those playing conditions. So either the casino was gullible, or (as the article states) they intended to use a high roller like him to promote the game, and rejuvenate their flagging business, and were willing to suffer some losses as some kind of marketing expense.

Obviously what made Mr Johnson's feat...

they intended to use a high roller like him to promote the game, and rejuvenate their flagging business, and were willing to suffer some losses as some kind of marketing expense.

< oh,,,, I see > , < yes maybe >


In addition to skills in MM math, and discipline, forex requires a comprehensive understanding of market behavior. For any professional gambler, however successful, to make the move to forex, there is a significant learning curve involved.

< strongly agree >


anyway,,, thank you for the comment,,, hanover,,,
best regards
w
  • #105
  • Aug 17, 2012 10:20pm Aug 17, 2012 10:20pm
The difference between gambling and forex:

With gambling the house has the edge, with forex, YOU can have the edge.
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  • #106
  • Aug 17, 2012 10:57pm Aug 17, 2012 10:57pm
Quoting KillerWhale
The difference between gambling and forex:

With gambling the house has the edge, with forex, YOU can have the edge.
I'm sorry but I don't believe that's entirely correct. Have you ever heard of professional poker players (et al)? Perhaps in FOREX, brokers/banks initially have "the edge".

Apparently though you can get "the edge" if you're trading or gambling. The evidence to support this idea lies in the fact that a given number of traders are successful just as there are a given number of "gamblers" who are successful.

The house (brokers/banks/casinos) have the edge. Still, you can win.
When the Joker is in the deck.. fear not and play it well
  • #107
  • Aug 18, 2012 12:05am Aug 18, 2012 12:05am
Quoting Slim Buffett
I'm sorry but I don't believe that's entirely correct. Have you ever heard of professional poker players (et al)? Perhaps in FOREX, brokers/banks initially have "the edge".

Apparently though you can get "the edge" if you're trading or gambling. The evidence to support this idea lies in the fact that a given number of traders are successful just as there are a given number of "gamblers" who are successful.

The house (brokers/banks/casinos) have the edge. Still, you can win.
Banks might have an edge, but I'm not trading against them, I'm riding with them, that gives me the same edge.
And to be honest, I've never understood poker and how you can win just by being smart.
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  • #108
  • Aug 18, 2012 12:50am Aug 18, 2012 12:50am
Quoting KillerWhale
Banks might have an edge, but I'm not trading against them, I'm riding with them, that gives me the same edge.
And to be honest, I've never understood poker and how you can win just by being smart.
Unfortunately, not all banks are in agreement about where the market will go. So how do you know you're "riding with them"? Which one will you ride on?

Could it be said that picking a random bank to follow is like putting your
money in a slot machine? Of course, that's where the house always has the edge (where I really prefer the word; advantage).

So I'm interested in hearing more about the advantage you have by following the bank(s) that you do.

Further, despite what the movies may depict, playing cards or trading forex isn't quantum physics.

IMHO
When the Joker is in the deck.. fear not and play it well
  • #109
  • Aug 18, 2012 9:48am Aug 18, 2012 9:48am
Quoting Slim Buffett
I'm sorry but I don't believe that's entirely correct. Have you ever heard of professional poker players (et al)? Perhaps in FOREX, brokers/banks initially have "the edge".

Apparently though you can get "the edge" if you're trading or gambling. The evidence to support this idea lies in the fact that a given number of traders are successful just as there are a given number of "gamblers" who are successful.

The house (brokers/banks/casinos) have the edge. Still, you can win.

yes,,word that make sense,,, slim buffett,,

The house (brokers/banks/casinos) have the edge.< advantage .> Still, you can win.
<< but it is not easy >>

<< brokers have an edge in terms of spread or requotes or delay of execution or no connection or ,etc,, etc, >>

Go as fast as you can but no faster

Cheer
w
  • #110
  • Aug 19, 2012 4:22am Aug 19, 2012 4:22am
Quoting Slim Buffett
Unfortunately, not all banks are in agreement about where the market will go. So how do you know you're "riding with them"? Which one will you ride on?

Could it be said that picking a random bank to follow is like putting your
money in a slot machine? Of course, that's where the house always has the edge (where I really prefer the word; advantage).

So I'm interested in hearing more about the advantage you have by following the bank(s) that you do.

Further, despite what the movies may depict, playing cards or trading forex...
Make up your mind. First you say: the banks have the edge, now you say: one bank has an edge, another one has not.

So what is it?
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  • #111
  • Aug 22, 2012 3:53pm Aug 22, 2012 3:53pm
this is funny because we assume that gambling is wrong?

I used to play poker (very well might I add) I never deluded myself into thinking it wasn't gambling even; though I had an edge.

As the govt department states, gambling is chance and compensation. If you put money in and there is a chance no matter how slim or not, it is gambling.

Business is Gambling
Poker is Gambling
Forex is Gambling
Horse Racing is Gambling

I guess it just depends on your average % return to determine if it's profitable gambling

I just love the fact you don't pay tax from casino (because on average you loose) but forex and investments have tax

although now I think about it if you value the saying time = money... does that mean you are gambling your life for your JOB....
  • #112
  • Aug 23, 2012 5:15am Aug 23, 2012 5:15am
According to me the following are similarities between trading and gambling:

1. There is high risk of losing money in both
2. Offers great opportunity to make huge money in short period of time
3. Both need risk taking ability to continue for long time
4. Both can be started with low investment
  • #113
  • Aug 23, 2012 10:35am Aug 23, 2012 10:35am
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.

Although there are similarities, such as risk and you can make huge amounts of money in "no time"
  • #114
  • Aug 23, 2012 10:46am Aug 23, 2012 10:46am
Yeah, that's the wise words of Wikipedia ... which part is not true for trading? You put up money because you want to win more, and you have no idea about the outcome (although you hope you'll win). Trading and gambling are no strangers, maybe there's just a fine line, who knows.

Quoting ladylyn
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.
forget about tomorrow, just steal away into the night
  • #115
  • Aug 23, 2012 4:55pm Aug 23, 2012 4:55pm
Quoting ladylyn
Gambling is the wagering of money or something of material value on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods. Typically, the outcome of the wager is evident within a short period.

Although there are similarities, such as risk and you can make huge amounts of money in "no time"
But one must understand the illusion,especialy in trading.
  • #116
  • Aug 23, 2012 8:50pm Aug 23, 2012 8:50pm
Quoting spekitox
Yeah, that's the wise words of Wikipedia ... which part is not true for trading? You put up money because you want to win more, and you have no idea about the outcome (although you hope you'll win). Trading and gambling are no strangers, maybe there's just a fine line, who knows.
very interesting !

Trading and gambling are no strangers, maybe there's just a fine line, who knows.
like walking on side of brink cliff so requires a balance so as not to fall

cheer
  • #117
  • Aug 24, 2012 12:55am Aug 24, 2012 12:55am
Even with roulette you can built an easy system that would beat the casino in the long run.
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  • #118
  • Aug 26, 2012 3:41pm Aug 26, 2012 3:41pm
@killerWhale

I knew people who said this and it may work for the short term but actually over the long term it will never work.

Einstein once said "You cannot beat a roulette table unless you steal money from it." although people still argue with his quotes, based on progessive gambling techniques

These could be the people who tell everyone forex isn't gambling because they are making profits from similar methods
  • #119
  • Aug 26, 2012 7:24pm Aug 26, 2012 7:24pm
Quoting KillerWhale
Even with roulette you can built an easy system that would beat the casino in the long run.
No you can not. Otherwise casinos would be out of business. Right?

To the OP

I have been a successful gambler (poker) and I have started learning about the markets to invest and see if I can have any edge there. Your question is not easy to answer, it depends what you try to compare. In gambling and trading only a very small % of ppl have consistent siginificant profits and the rest are break-even, or lose small or big.

I guess successful gamblers and traders share a few skills like controlling their emotions, assesing risk / reward, money management, math skills, analytical skills etc. The truth is that successful traders today require an extremely diverse set of skills to survive in today's markets (complex maths, programming, etc sorry techinical analysis won't cut it).

In poker the variance can be extremely frustrating for most ppl and so you require stronger emotional control. However it's easier (my opinion that is) to define your edge and for example sit in a game where you expect to make money or not (sit). In trading there is a huge amount of different ways to possibly extract "alpha" money from the markets but I find that your edge is not always clear and definitely it is very likely for any "edge" to disappear.

This is for the small %age of ppl who are professional gamblers or traders*. For the rest of the ppl I don't think there is any significant difference between gambling and trading. The only thing that matters is how quick or slow they will lose.

* Of course, and this is the BIG difference, most professional traders use OPM (other ppl's money) whereas most gamblers use their own capital. I'm sure everyone can understand the difference
  • #120
  • Aug 26, 2012 7:52pm Aug 26, 2012 7:52pm
Poker in the States is a game of skill. This is huge news for iPoker. (Black Friday charges have been significantly reduced thanks to this.)

http://www.nytimes.com/2012/08/22/ny...jackbweinstein

Quote
The judge’s reason: poker is more a game of skill than a game of chance, so game operators should not be prosecuted under the federal law the prohibits running an illegal gambling business.
You don't play your cards in poker, you play the people.
Play the players, not the cards.
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