Do You Think Trading is Gambling?

[OTCkrak]

whats wrong with gambling?

 

[nysestocks]

Quote from Mr J:

Any credible dictionary will disagree with you. Respectable, honest and legal professions? The financial markets are as dodgy as the 'gambling' markets, and about as many people have no idea.

The negative connotation is generated by the ignorant masses, so if your problem is that people look down upon what may or may not be your profession, then your problem is with them.

Not only are the operators dodgy, they are also a closely knit circle, much like the legal profession, medical, etc, etc. etc!

One must remember that the masses have been kept in the dark (ignorance) for centuries by the so called elite in society, and this of course has been, and is still being, done for an obvious reason.

If someone wants to be foolish enough to not face facts that is entirely up to them, but for me it is very easy as I just see them all as a bunch of big fat pigs, leaving slops all over the place for me to pick up as I gamble my way thru the day!

 

[nysestocks]

Quote from OzMega:

In an effort to distinguish between �Gambling� and �Non-Gambling� activity, many have argued that, �Anytime you put your money at risk, you are gambling,� or some variation on that theme. Which begs the question, �Have you found a way to NOT put your money at risk?� A Holy Grail of sorts? An infallible way to protect your purchasing power against all enemies foreign and domestic? Me thinks not. Your money is ALWAYS at a risk of loss. Like anything else, currency carries an intrinsic risk of loss(you can�t opt out), so this argument is simply unfounded.

Please don�t kid yourself about an FDIC savings account or some similar type instrument either. Your �numbers� only matter in a relative sense. With the advent of a fiat currency, your gummit can print you into submission if need be.

If you still think gambling and trading are the same, try this simple experiment: If you say �Doyle Brunson is a great Gambler,� then everyone can agree(at least those who know of him) this is a true statement. However, if you say �Doyle Brunson is a great Trader,� the sentence becomes nonsensical. Clearly the words convey different meanings, they are not synonyms, nor are they equivalent.

If it still isn�t clear, then call your travel agent. Be specific and to the point. Tell him, �Please listen closely. Eventually I would like to get a job as a Professional Trader, so I want you to schedule me for a week of Trading Training in Vegas. I only want to spend my time in classes with Professional Traders. I don�t want to do anything else but learn how to become a Professional Trader.� My guess is you will probably end up at Bright Trading�s corporate headquarters and not in a card counting class.

In any event, it has been interesting reading some of these postings. It does seem strange that so many vehemently wish to view their livelihood as nothing more than a crapshoot, but it appears some are long that position. Someone once said that �Everyone gets what they want out of the market.� I suppose that�s true for Gamblers too. Ultimately it�s your world �you can put the trees wherever you like�

THE BOTTOM LINE:
Traders are NOT Gamblers. However, there are a great many Gamblers who donate to our cause!

To all the Traders out there, Cheers! And Happy Trading!
To all the Gamblers �.well ...good luck!

Load of crap with a bit of you know what thrown in!

There are no experts in the trading game, even though many think they are!

If some so called "professional traders" are so good at what they do, then why do they have to "teach" others? Why don't they just make the big money every day?

As I have said, it is a no brainer, really!

 

[Jachyra]

Quote from Mr J:

But Jachyra, chance is a factor in all trades, apart from those that lock in a profit without risk ever existing (e.g. a true arbitrage).

As for the definition of chance, it just means that there is no certain outcome.

With all due respect, that's not how I interpret the definition of "chance." If you look at the definition and read it closely, it states, "the absence of ANY cause of events that can be predicted, understood, or controlled." Therefore, if there are at least SOME aspects of it that can be "predicted, understood, or controlled" (i.e. supply & demand economics... an influx of buyers causing the price to go up, or an influx of sellers causing the price to go down) then by definition its not chance.

Again, I am not trying to assert that its impossible to gamble on the markets... as far as I'm concerned its possible to gamble on almost anything. And personally, I do believe that the majority of traders and retail investors ARE gambling just because they don't have the ability to get any type of edge in the markets. My point is that its completely inaccurate, and somewhat rather unsophisticated, to just unilaterally & uncategorically assume that all trading is gambling and that all traders are gamblers... because its not supported by any actual definition of "gambling" that exists in the dictionary or any legally defined definition in state or federal law

Just about the only definition of gambling that does support it, are some of these loosely defined, partially fabricated, and generally misconceived definitions of the word that the average person "believes" to be the definition of gambling... many of which are being thrown around on this thread.

 

[nysestocks]

Quote from SCI new york:

Trading is gambling, no matter what moronic logic you try and use to dispute that fact. If you don't think so, you're in denial. Market speculation is exactly that, speculation. There is no guarantee in trading/markets/gambling. You try to have the most/best edges you can but that doesnt change the fact that you're betting. On a trade you're betting you're on the correct side of the trade to increase your profits. At a casino you're betting you're on the right side of the bet, wether its blackjack, poker, or roulette. If you don't think you gamble when you trade, you're seriously delusional.

Best post I have read so far, and not just because of the obvious reason!

You have mentioned some key words that sum it all up.

The next step, once the fact is taken on board, is to not listen to the so called experts, actually, if you (general) do the exact opposite to what they preach, you will be a professional gambler in no time at all!

 

[JSSPMK]

Bingo!

Quote from Jachyra:

With all due respect, that's not how I interpret the definition of "chance." If you look at the definition and read it closely, it states, "the absence of ANY cause of events that can be predicted, understood, or controlled." Therefore, if there are at least SOME aspects of it that can be "predicted, understood, or controlled" (i.e. supply & demand economics... an influx of buyers causing the price to go up, or an influx of sellers causing the price to go down) then by definition its not chance.

Again, I am not trying to assert that its impossible to gamble on the markets... as far as I'm concerned its possible to gamble on almost anything. And personally, I do believe that the majority of traders and retail investors ARE gambling just because they don't have the ability to get any type of edge in the markets. My point is that its completely inaccurate, and somewhat rather unsophisticated, to just unilaterally & uncategorically assume that all trading is gambling and that all traders are gamblers... because its not supported by any actual definition of "gambling" that exists in the dictionary or any legally defined definition in state or federal law

Just about the only definition of gambling that does support it, are some of these loosely defined, partially fabricated, and generally misconceived definitions of the word that the average person "believes" to be the definition of gambling... many of which are being thrown around on this thread.

 

[nysestocks]

Quote from trader3cnd:

The ultimate aim of trading is price discovery.

Trading in any market is essential for proper valuations.

Trading can be gambling for some people called impulsive or emotional traders. They too provide liquidity and money to the whole industry to function better. Gamblers are needed.

Actually, I am looking for some gamblers to make money from.

The ultimate aim of trading is to make money!

You should have said "suckers" are needed!

As for valuations, I think you have let the cat out of the bag there!

You did however mention one very important fact about trading, that most will have no clue about, yet, it is so obvious that it is not so obvious.

 

[nysestocks]

Quote from Jachyra:

Thats like saying that the casino is gambling just because they don't win every single bet, or that an insurance company is gambling every time they have to pay out an insurance claim. In odds based businesses, you win some and lose some, thats why they're called odds based businesses. Winning or losing money on any given odds based opportunity is not what determines whether or not its gambling... only whether or not the percentages are in your favor when the bet or position is established.

Technically, it has to do with whether or not the bet or trade has positive or negative expected value over the long run. If you have +EV then its clearly not gambling... if you have -EV then by definition it is.

Look at it this way... if you place a bet where your odds of winning are 80%, and you make $1 every time you win and lose $1 every time you lose... on average, if you take the same bet 100 times, you'll win 80 times, giving you a gain of $80, and you'll lose 20 times, giving you a loss of $20. That means that if you took the same bet every single time, and took it enough times to make the sample size significant, you'd net a gain of $60 every 100 bets. In this situation you'd have +EV and by definition you would not be gambling.

The fact that you lose 20% of the time in and of itself does not make it gambling. The only way it would be gambling is if you were on the other side of the bet in which you only had a 20% chance of winning. Then you'd win $1 20 times out of a hundred, giving you a profit of $20, and you'd lose $1 every 80 times out of 100, which would be an $80 loss... so you'd be netting a loss of $60 on average for every 100 times you placed the same bet. In this situation you'd have -EV and by definition you would be gambling, because the only way you could possibly turn a profit in the long run would be if the laws of averages took a random walk and you ended up winning more than the 20% of the time you were supposed to.

Of course this reminds me of that old saying that Henry Ford once said... "whether you think you can, or whether you think you can't... you're right." Well in this respect, "whether you think trading is gambling, or whether you think trading isn't gambling... you're right." Because if you're engaged in an odds based business and you don't even know the difference between playing the odds and gambling, or don't know anything about positive or negative EV... then most likely you are in fact one of the many market participants who are gambling... but just because you are gambling in the markets don't think for a second that everybody else is gambling. I assure you that the best traders in the world spend a lot of time trying to make sure that they consistently don't find themselves in situations where they're gambling (although even the best will find themselves in that situation every once in a while).

It is correct to say that it is possible to gamble in trading if you want to, or that sometimes, depsite your best efforts to avoid it, you find yourself in situations that in retrospect ended up being a gamble. But its not any more correct to say that trading is gambling than it is to say that trading is a unicorn.

Do you "actually" trade?

 

[BSAM]

Quote from SCI new york:

Trading is gambling, no matter what moronic logic you try and use to dispute that fact. If you don't think so, you're in denial. Market speculation is exactly that, speculation. There is no guarantee in trading/markets/gambling. You try to have the most/best edges you can but that doesnt change the fact that you're betting. On a trade you're betting you're on the correct side of the trade to increase your profits. At a casino you're betting you're on the right side of the bet, wether its blackjack, poker, or roulette. If you don't think you gamble when you trade, you're seriously delusional.

Exactly.

Now, watch this:

1. The sky is blue.

2. It's dark at nighttime.

3. Dogs bark.

4. The Lakers play basketball.

Okay, let's see how long it takes for some of our certified geniuses on ET to "prove" these statements false.

 

[Mr J]

Quote from Jachyra:

With all due respect, that's not how I interpret the definition of "chance." If you look at the definition and read it closely, it states, "the absence of ANY cause of events that can be predicted, understood, or controlled."

My point is that its completely inaccurate, and somewhat rather unsophisticated, to just unilaterally & uncategorically assume that all trading is gambling and that all traders are gamblers... because its not supported by any actual definition of "gambling" that exists in the dictionary or any legally defined definition in state or federal law

Just about the only definition of gambling that does support it, are some of these loosely defined, partially fabricated, and generally misconceived definitions of the word that the average person "believes" to be the definition of gambling... many of which are being thrown around on this thread.

You're just choosing the definition which suits your argument. Chance can refer to randomness, predictability, probability etc. It's a much less specific word than 'gamble'. When dealing with the various outcome of events, chance just refers to the randomness of the outcome.

I can state that all traders are gamblers, because the definitions do support that argument. Throw out the legal definitions of gambling - it's formed by lawyers or politicians with an agenda, who don't understand the key mathematical principles behind the activities.

I have not made up any definition of gambling, it's right there in the dictionary. Furthermore, my arguments are supported by those in the field of mathematics, professional 'gamblers' and quite a few successful traders. The only incorrect definition of gambling being thrown around in this thread is to suggest that skill determines whether it is gambling, or whether gambling is restricted to just casino games, poker, sportsbetting etc.

I don't really like this discussion as it is quite trivial. What should be discussed is the mathematics behind the two activities, and how they are essentially the same.