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What are similarities between trading and gambling?

  • #141
  • Edited 7:59am Nov 9, 2015 7:43am | Edited 7:59am
Quoting wendykurnia
broker can do with slippages or requote casino also may do the same http://www.youtube.com/watch?v=hd8Bp...eature=related

YES. Must be something like this.... Does anyone have a translation to this video?

- Observe dealers. I usually experience a change of dealers after wins are flowing as UNLUCKY.

The dragon doesn't have to eat everyone to be happy.
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  • #142
  • Nov 9, 2015 8:45am Nov 9, 2015 8:45am
Very similar feeling when victory.
The same greed and impatience. In gambling, such as casinos - it plays against you, to take away the money. In forex so only if the broker is DD.
The difference is analysis in gambling has not the slightest sense.
It is impossible to calculate. There are no repetitions, no patterns.
  • #143
  • Nov 9, 2015 8:50am Nov 9, 2015 8:50am
What is trading?
Trade - is difficult, because about 95% of those who try to trade fiasco. Trading is like a gamble, but it is not an absolute similarity. Trading - the question of capital accumulation by using chances for a number of transactions. Trading - a question of probabilities, in your interest to limit your risk of a small percentage of the total capital in any single trade.
  • #144
  • Nov 9, 2015 11:51am Nov 9, 2015 11:51am
There are definite streaks and trends over the short term in gaming. If you pay attention you can see it. That is why some players are able to consistently able to do well in defined sessions...

For example, there was a series of definite streaks of Banker vs. Player in the baccarat we played including a few key spots that patterned a certain way. Sound familiar? We kept looking for some of these patterns to break and they got stronger.
  • #145
  • Nov 9, 2015 1:48pm Nov 9, 2015 1:48pm
Quoting R19
Take baccarat for example........
I'm afraid I remain unconvinced. None of what you've said changes the house edge.
Quote
There are definite streaks and trends over the short term in gaming. If you pay attention you can see it. That is why some players are able to consistently able to do well in defined sessions... For example, there was a series of definite streaks of Banker vs. Player in the baccarat we played including a few key spots that patterned a certain way. Sound familiar? We kept looking for some of these patterns to break and they got stronger.
Streaks and trends exist in any game, but a belief that they can be exploited for profit is a form of gambler's fallacy.

I believe in the infallibility of expectancy math. Other people are welcome to differ. It's their money.

Anyway, it sounds like you're having fun, so that's cool.
  • #146
  • Edited 3:52pm Nov 9, 2015 3:16pm | Edited 3:52pm
House edge assumes uniform play over any duration of time. Play is not uniform.

http://wizardofodds.com/gambling/house-edge/


Otherwise it's like stating that over the course a trading week, EURUSD is expected to have XYZ range and ABC volatility, etc.
  • #147
  • Nov 9, 2015 3:45pm Nov 9, 2015 3:45pm
Far out. Are some of you for real?
Congratulations ScalaFX for coming out of the closet!
  • #148
  • Nov 9, 2015 3:45pm Nov 9, 2015 3:45pm
Quoting R19
House edge assumes.....
Don't trade with money you can't afford to lose --- you are never going to win.
si hoc legere scis nimium eruditionis habes
  • #149
  • Nov 9, 2015 4:02pm Nov 9, 2015 4:02pm
Quoting nubcake
Far out. Are some of you for real?

Do you mind qualifying? You could be referring to any or all of us....
  • #150
  • Edited 11:47pm Nov 9, 2015 4:54pm | Edited 11:47pm
Quoting R19
House edge assumes uniform play over any duration of time. Play is not uniform. http://wizardofodds.com/gambling/house-edge/ Otherwise it's like stating that over the course a trading week, EURUSD is expected to have XYZ range and ABC volatility, etc.
Agreed, play is not necessarily uniform over a short period of time. Play a few hands, and you might get lucky and win, or you might be unlucky and lose. The concepts that you mantioned (streaks, observation, flow, stop points, money management, ....) have no real effect on future outcomes.

House edge (or expectancy) is the average result you can expect. The more hands you play, the closer your result will get to the house edge. It is all about the "law of large numbers". The math involved is inviolable. There is no room for opinion.

Moreover, if these casino games could be beaten mathematically, every Ivy League math graduate would be a millionaire, and every casino would be broke; or at least they would be forced to change the rules and playing conditions, so that it couldn't possibly happen. Blackjack is the only casino game that can be beaten mathematically, but only if you can count cards without being detected. (That's because the house edge changes depending on the composition of cards remaining in the shoe. If there are enough high cards remaining, the edge can occasionally favor the player). That's why there was a MIT blackjack team that won big for a while. But there's no team who beat Baccarat or 3 Card Poker -- at least not long term.

Markets are different. They are not a completely random game. They are moved by a number of underlying factors: economics, news, orderflow, correlations, triangular equilibrium, and some more here. Hence markets are potentially beatable.

Anyway, like I said, it's your money.
  • #151
  • Nov 9, 2015 5:27pm Nov 9, 2015 5:27pm
Quoting R19
Do you mind qualifying? You could be referring to any or all of us....
I can't speak for nubcake, but I was referring specifically to you. If you believe it is mathematically possible to beat a casino, at a game the casino offers, you won't succeed in trading. While trading (unlike casino games) is mathematically beatable, like Hanover pointed out, in order to beat it you need a good understanding of statistical expectation --- a basic concept you seem completely unable to grasp, even when it is laid out for you.
si hoc legere scis nimium eruditionis habes
  • #152
  • Edited 5:52pm Nov 9, 2015 5:41pm | Edited 5:52pm
Quoting numbnuts
{quote} I can't speak for nubcake, but I was referring specifically to you. If you believe it is mathematically possible to beat a casino, at a game the casino offers, you won't succeed in trading. While trading (unlike casino games) is mathematically beatable, like Hanover pointed out, in order to beat it you need a good understanding of statistical expectation --- a basic concept you seem completely unable to grasp, even when it is laid out for you.

Makes sense given that a lot of successful gamblers went into financial markets and vice versa. The equity options markets were practically built by successful gamblers. Keep believing your MIT math books. And please let me know when I can tour Virtu Financial with you because some of you speak as if you believe that you work there.

Books about Financial Trading and Gambling: I'll post one, but I could keep adding to the list...
Trading Bases: How a Wall Street Trader Made a Fortune Betting on Baseball
by Joe Peta

All gamblers lose!!!!! That is why at the most ungodly hour in the morning the casinos are filled! Filled with losers!!!

I'll make some of you feel better! I just went to the casino in the last 5 minutes and bet it all on one hand of black jack $100,000 - And I lost. Efficient casinos. House edge. Drats!

/thread
  • #153
  • Nov 9, 2015 5:56pm Nov 9, 2015 5:56pm
Quoting R19
{quote} Makes sense given that a lot of successful gamblers went into financial markets and vice versa. ....
I actually made decent money playing poker before I started trading. But I never played against a casino - that would be stupid, I played against people who didn't understand the underlying mathematics of the game as well as I did. There is a big difference between risking money when you calculate the odds are in your favor, and risking money when you have no idea how the odds of the game work. There is a big difference between betting against somebody dumber than you, and betting against somebody smarter than you. One of those strategies will always win in the long run, the other will always lose.
si hoc legere scis nimium eruditionis habes
  • #154
  • Nov 9, 2015 6:17pm Nov 9, 2015 6:17pm
"One of those strategies will always win in the long run, the other will always lose"

I like that statemet ;

both trading and gambling are good , if you can make sure that always win in the long run , can you ?
paid for waiting , a zero sum game, keep dancing till the end
  • #155
  • Nov 9, 2015 6:46pm Nov 9, 2015 6:46pm
Every good trader understands gambling. A person who doesn't understand gambling or at least the basic probability principles, is very unlikely to be profitable in the long run.
Every new trader should start with books about gambling/betting, and probability. Not with technical analysis. First you learn how to manage risk, how to manage your money, and how to manage your emotions(improve the mental toughness) Then you learn about market mechanics, how the order book works...... and in the end you learn......technicals, fundamentals...... and everything else.
Most people start the opposite way and usually stop the learning process after technicals.... and are only obsessed with charts.
There is a serious lack of quality education in trading... ...I have the feeling that there is a strong correlation between the 95% of failed traders and 95% of the garbage that is found inside trading books, courses and seminars.
There seem to be a whole industry that is busy into programming retail traders to lose.
  • #156
  • Nov 9, 2015 6:58pm Nov 9, 2015 6:58pm
da gambler ( Kenny Rogers ) vs leon the profesional ( Sting ) ....
  • #157
  • Nov 9, 2015 7:12pm Nov 9, 2015 7:12pm
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  • #158
  • Nov 9, 2015 7:28pm Nov 9, 2015 7:28pm
in essence trading and gambling are mind games. where timing is controlled by market makers/house. good trader/gambler control emotions and play by rules.
  • #159
  • Edited 7:43pm Nov 9, 2015 7:29pm | Edited 7:43pm
There is a lot to be learned from proficient gamblers. Take Annie Duke's interview with Covel for example.

IMO trading is wider than just mere speculation......... but in that subclass called speculators (which most of us in this space are), we are just gamblers.....*enter Seinfeld*.....not that there's anything wrong with that!!!! :-)

"Last year people won more than one billion dollars playing poker. And casinos made twenty-seven billion just by being around those people."

Samantha Bee

  • #160
  • Nov 9, 2015 7:29pm Nov 9, 2015 7:29pm
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