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Is there a difference between trading and gambling?

3K views 33 replies 14 participants last post by  Eric.L 
#1 ·
thoughts?
 
#4 ·
As a gambler I would say yes its exactly the same. Most gamblers are taking calculated risks when they lay their money down just like when traders do it.

You can also compare new gamblers with new traders. Both have a high percentage of people who jump in head first and get burned bad because they did not do their due diligence and were not actually taking calculated risks and just threw their money at something and hoped it would be profitable.

That's why when people say I'm a gambler or refer to it as a bad thing I always say yea but I do my research and I'm good at it so who cares.
 
#6 ·
If you compare gambling and trading to blackjack and poker, gambling, like blackjack requires you to put your money before you receive your cards. Poker and trading allows you to do most of your "investment" after receiving more information and increasing your odds for success.
 
#9 ·
Investing is my gambling...It's also a hobby, we do what we enjoy. I do think investing may be somewhat safer because there is so much information available but world class poker players didn't get to the top by dumb luck.
 
#12 ·
I'm a pit boss in a casino and I think gambling takes a lot more from people than trading. I think that trading is a lot more of a calculated risk than gambling. I've seem people lose houses and business to gambling I'm sure that goes both ways but working in the industry you see people's fortunes start to dwindle. The bets get smaller their hygiene gets worse and they are at the casino a lot more often. In the long run the casino will always win.
 
#15 ·
By definition, trading is a form of gambling. All businesses have an uncertainty/gambling element. If you're comparing a knowledgeable trader to someone playing a slot game- trading is obviously much less of a gamble.

At the end of the day, whether your at a casino playing Blackjack, or trading equities, there are ways to increase the probability of success.


gam·ble (gmbl)
v. gam·bled, gam·bling, gam·bles


1.
a. To bet on an uncertain outcome, as of a contest.
b. To play a game of chance for stakes.

2. To take a risk in the hope of gaining an advantage or a benefit.
 
#18 ·
great def. for success in markets:
"Success in the markets is not about instinct, divine inspiration or spontaneous intellectual combustion. It is about intelligent data processing, sound method and the management of risk and resource that is both effective and adaptive to change."
 
#22 ·
Winning for me doesn't mean winning every bet or every trade its defined as positive ROI at the end of the year, month, whatever you want it to be. Its ridiculous to think you can win every trade and every bet but as long as you are winning a decent amount of more trades and bets than you are losing you're golden.
 
#29 · (Edited)
The only type of gambling I'd compare with trading would be poker. As a regular trader and a casual poker player you experience several similarities with the decision making process, risk/reward scenarios and psychological aspects. It's no coincidence that you see countless hedge fund guys playing high stakes poker.

The biggest difference between all forms of gambling and trading is that when you place a bet of $1,000 you either lose the $1,000 or win your bet, with trading you can invest $1,000 and pull $900 off the table if circumstances change. That's a pretty significant advantage.

Also, if you look at sports betting, the best of handicappers will pick at only 59% against the spread. Bookies have the ability and legal right to close your accounts and ban you if you're winning too much money and they don't have to give you an explanation (happens a lot here in Australia, and bookies collaborate and share clients so if you get shut down by one, chances are the rest will close you out as well). In the markets you can trade with a 100% success rate and nobody can stop you.

One of my favorite sports betting success stories is Bob Voulgaris, and if you follow his twitter you'll see that he rarely finds a bookie in Vegas that'll take a bet of more than $10k. The more successful you are, the more difficult it becomes and he doesn't recommend handicapping as a career to anyone.

I'm going to assume nobody is making the comparison to casino games here, if so that's a little ridiculous considering the mathematical edge.
 
#32 ·
Does anyone here play craps? That's the game I see most investors, brokers, and bankers play at my casino and I think it relates to trading more than poker now that I think about it. You can bet both ways like going long or short on a stock, you can hedge your bets, you can change your bets or bet on numbers as the roll continues pressing numbers or pulling money off the table. We're as in poker you can only add to the pot you can't pull money out.
 
#33 ·
Yes but craps is mainly a game of chance where as with poker sometimes it is the luck of the draw on cards but skill sets good players apart from the rest, there are a lot of human elements when playing poker against others that you can take advantage of. you cannot do this in craps, you are simply betting for or against the dice. Most of those people play craps because it offers the biggest rush in the shortest amount of time. You can constantly modify your position but at the end of the day its you against the dice it doesnt matter whos rolling them.
 
#34 ·
Yeah I get what you're saying and you're right about craps technically craps is a game of chance that's why they don't allow it in all states where as poker is technically a game of skill well from a casino stand point at least.

I was just putting craps in there to be thought about I'm not really a gambler I play maybe 4 times a year and when I do play it's blackjack or craps.
 
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