Do You Think Trading is Gambling?

[BSAM]

Quote from Jachyra:

.....I have known many people who have made quite a nice living gambling professionally -- both in the markets and at the casino. But the question of the thread was "is trading gambling" and the answer to that question is quite simply -- no. Although I've said many times that its not only possible to gamble in the markets, that its probably more common for people to gamble in the markets than not.

Let's see here now.....

Your friends gamble in the markets.
It is possible to gamble in the markets.
It is probably more common for people to gamble in the markets than not.

Yet, you are that rarest of breeds who participates in the markets, but your tading isn't gambling.

Hmmmmm.....(Scratching head).....Sumpin' jest don't scheem right here.

 

[Jachyra]

Quote from BSAM:

Let's see here now.....

Your friends gamble in the markets.
It is possible to gamble in the markets.
It is probably more common for people to gamble in the markets than not.

Yet, you are that rarest of breeds who participates in the markets, but your tading isn't gambling.

Hmmmmm.....(Scratching head).....Sumpin' jest don't scheem right here.

I never said that... you did. I try to do my best to avoid making sweeping generalizations and blanket statements.

 

[BSAM]

Quote from Jachyra:

I never said that... you did. I try to do my best to avoid making sweeping generalizations and blanket statements.

???HUH???

 

[Jachyra]

Quote from Mr J:

I've debated over the definition in this thread, and I'm pretty sure it was with Jachyra. The funny thing is somehow it switched from 'gambling' to 'chance', when I said 'chance' is always a factor.

The fact is that any credible dictionary has at least one definiton as this: to place a wager on an uncertain outcome. Gambling in a casino or trading in the markets both fit this description (the two factors being 'stake' and 'uncertain outcome'), so I don't know why people still deny it. It's also pretty clear that many people don't read, as I've brought up the definition a number times only to see people ignore it and state something along the lines of "trading isn't gambling because I have an edge".

The definition isn't really important though, just as long as it is understood that bets/trades need to be placed with a positive expectation.

The debate switched to "chance" because the first two definitions of gambling both indicated that the results had to be dictated by chance... so obviously the definition of it became important.

But fine... for the sake of argument lets just say we take your definition.... that its gambling anytime the results are uncertain. I would still contend that if you consistently take more +EV trades than -EV trades, over the long run, the end result is CERTAIN... you will make more money than you lose.... GUARANTEED. If you take more -EV trades than +EV trades, in the long run, you will lose more money than you make.... GUARANTEED. The end result is very easy to predict and the outcome of doing either is very certain... and that is a statistical fact.

So, even using your own definition or connotation of the word, at best all you can say is that any one trade or any small number of trades are gambling. But that once you have enough trades to have a sufficient sample size, it can not possibly be gambling because whether you made or lost money, the outcome was certain and predictable in advance.

 

[nyustudent]

Quote from Jachyra:

But fine... for the sake of argument lets just say we take your definition.... that its gambling anytime the results are uncertain. I would still contend that if you consistently take more +EV trades than -EV trades, over the long run, the end result is CERTAIN... you will make more money than you lose.... GUARANTEED. If you take more -EV trades than +EV trades, in the long run, you will lose more money than you make.... GUARANTEED. The end result is very easy to predict and the outcome of doing either is very certain... and that is a statistical fact.

So, even using your own definition or connotation of the word, at best all you can say is that any one trade or any small number of trades are gambling. But that once you have enough trades to have a sufficient sample size, it can not possibly be gambling because whether you made or lost money, the outcome was certain and predictable in advance.

OMG thats a GREAT point! Even their own definition doesnt support their claim that trading is gambling.

Plus their arguments are getting so ridiculous. Now they want us to believe that flying on an airplane is gambling just because there is always some small chance that it might crash? Get real dudes! Is eating also gambling just because there is always a small chance that you might choke and die?

 

[JSSPMK]

Like Don said:

If you made money - good
If you lost money - bad
Money in the bank end of week - excellent

Whether a trader considers to call trading gambling is a personal matter. Everybody knows that it is not widely accepted as gambling, because apart from similarities there are also differences, that's why we have so many words, so that different meanings have matching words.

But I will argue that it is not beneficial for a trader to realise that "trading is gambling" as some have suggested, understanding how to control risk/probabilities/etc. are of course essential.

 

[JSSPMK]

"...There is no such thing as an event being "due." An event is not more likely just because it has not happened for a long time. For example, many people mistakenly believe that if one color in roulette has won several times in a row then the other color is overdue and they should bet on it. While the ratio of reds to blacks will always approach 50/50 in the long term, it can not be concluded that this will happen in the short term. It does not matter what the history of past spins is; every trial in games of luck like roulette are independent, and each color is equally likely to come up every time. If you don't believe me, try guessing the toss of 1,000 coin flips using any method of prediction you like. I guarantee that 99% of the time you will get between 459 and 541 correct.

The idea that events can be "due" is known as the Gambler's Fallacy..."

Markets are driven by humans, a true gambling event is independent of all previous ones & can not be guaranteed as there is no intervention of a human. So considering that, why would trading be gambling? Surely it is dependant on how an individual goes about it.

 

[ElCubano]

Quote from BSAM:

Let's see here now.....

Your friends gamble in the markets.
It is possible to gamble in the markets.
It is probably more common for people to gamble in the markets than not.

Yet, you are that rarest of breeds who participates in the markets, but your tading isn't gambling.

Hmmmmm.....(Scratching head).....Sumpin' jest don't scheem right here.

think about if it really wasn't gambling...it'd be 95% make it and 5% don't ...considering the cost to entry into this industry....peace

 

[Jachyra]

Quote from JSSPMK:

Markets are driven by humans, a true gambling event is independent of all previous ones. So considering that, why would trading be gambling? Surely it is dependant on how an individual goes about it.

I completely agree... true gambling events are governed by chance... the markets are governed by supply and demand.

 

[JSSPMK]

Quote from Jachyra:

I completely agree... true gambling events are governed by chance... the markets are governed by supply and demand.

And if trading was gambling just because outcome could not be guaranteed (as no event in life ultimately can be guaranteed apart from death), that would make a bicycle a car