Do You Think Trading is Gambling?

Jachyra · Feb 4, 2009

Quote from ElCubano:

no i didnt read "The theory of GAMBLING and statistical logic"....

You judged the contents of a book by the title on the cover? You know, its too bad there isn't some famous saying or pun advising people against doing that.

FYI, if you don't already have that book on your shelf, and haven't already read it multiple times, perhaps thats been the problem the entire time that this thread has been in existence.

Pekelo · Feb 4, 2009

Quote from MAESTRO:

Do you people read books at all?

Sure:

MAESTRO · Feb 4, 2009

Quote from Jachyra:

You judged the contents of a book by the title on the cover? You know, its too bad there isn't some famous saying or pun advising people against doing that.

FYI, if you don't already have that book on your shelf, and haven't already read it multiple times, perhaps thats been the problem the entire time that this thread has been in existence.

In a simple language: Placing bets on a coin tossing game played on a fair coin is gambling. But if it is noticed that the coin is "unfair" (has higher probability to land on tails, for example) placing the bets on the higher probability outcome is a statistical game. This gave birth to the term "statistical arbitrage". Overall, traders who place their bets without certain degree of confidence and the knowledge of a sustainable statistical skew are gamblers.

ElCubano · Feb 4, 2009

Quote from Jachyra:

You judged the contents of a book by the title on the cover? You know, its too bad there isn't some famous saying or pun advising people against doing that.

FYI, if you don't already have that book on your shelf, and haven't already read it multiple times, perhaps thats been the problem the entire time that this thread has been in existence.

did you read it?...please elaborate how the author expalins how the market is not a game of chance. And yes I am going to judge this book by its cover...

I never daid one couln't make money from games of chance I just agreed that trading is gambling....

JSSPMK · Feb 4, 2009

Quote from MAESTRO:

In a simple language: Placing bets on a coin tossing game played on a fair coin is gambling. But if it is noticed that the coin is "unfair" (has higher probability to land on tails, for example) placing the bets on the higher probability outcome is a statistical game. This gave birth to the term "statistical arbitrage". Overall, traders who place their bets without certain degree of confidence and the knowledge of a sustainable statistical skew are gamblers.

ElCubano · Feb 4, 2009

Quote from MAESTRO:

In a simple language: Placing bets on a coin tossing game played on a fair coin is gambling. But if it is noticed that the coin is "unfair" (has higher probability to land on tails, for example) placing the bets on the higher probability outcome is a statistical game. This gave birth to the term "statistical arbitrage". Overall, traders who place their bets without certain degree of confidence and the knowledge of a sustainable statistical skew are gamblers.

you are 100% correct ...anyone with inside info and front running are not gamblers, they are the "Unfair" coin in the market.

ivanbaj · Feb 4, 2009

Quote from MAESTRO:

In a simple language: Placing bets on a coin tossing game played on a fair coin is gambling. But if it is noticed that the coin is "unfair" (has higher probability to land on tails, for example) placing the bets on the higher probability outcome is a statistical game. This gave birth to the term "statistical arbitrage". Overall, traders who place their bets without certain degree of confidence and the knowledge of a sustainable statistical skew are gamblers.

Sustainable.

You take data from history as a "prove" for sustainability. I call that taking a chance (gambling).

The coin in your example does not change. If it is unfair it will stay unfair. What if the game is played with a new coin every time and your "system" shows a possibility of "statistical arbitrage"? Would you still hope that you are not gambling? What if the coin changes every month or every 6 months? Sooner or later your "statistical arbitrage" will be wrong and you will be gambling. At the best you will be going from gambling to "statistical arbitrage" and back.

We are all gamblers. No exception.

BSAM · Feb 4, 2009

Quote from Jachyra:

You judged the contents of a book by the title on the cover? You know, its too bad there isn't some famous saying or pun advising people against doing that.

FYI, if you don't already have that book on your shelf, and haven't already read it multiple times, perhaps thats been the problem the entire time that this thread has been in existence.

Jachyra---

Three questions:

1. Do you trade real money?

2. If you put on a trade, are you certain of a profit?

3. Do you ever have a losing trade?

(These are really simple questions. These are yes or no questions. Just answer each with, yes or no. I don't need one of your long diatribes.)

ElCubano · Feb 4, 2009

Quote from ivanbaj:

At the best you will be going from gambling to "statistical arbitrage" and back.

We are all gamblers. No exception.

since one will never know what part of the spectrum there are in when going back and forth it will always be a gamble...

the one thing the market does offer is a chance to make money..

Jachyra · Feb 4, 2009

Quote from BSAM:

Jachyra---

Three questions:

1. Do you trade real money?

2. If you put on a trade, are you certain of a profit?

3. Do you ever have a losing trade?

(These are really simple questions. These are yes or no questions. Just answer each with, yes or no. I don't need one of your long diatribes.)

1. Yes

2. Of course not but thats irrelevant because trading, gambling, or any business or activity that has to do with odds and statistics is judged not on any single event or opportunity but over many many events and opportunities (the long run)

3. Of course.... even if you have a huge edge like 80% you're still going to lose, on average, 20 times out of 100

And at the risk of going on one of my long diatribes, as you so politely put it, I will point out that not only are your questions irrelevant, as they have nothing to do with whether or not trading is gambling, but they also demonstrate that you're missing the subtle nuance that differentiates trading from gambling that MAESTRO (as well as several others) are trying to make.