Do You Think Trading is Gambling?

Do You Think Trading is Gambling?

  • Yes

    Votes: 140 44.7%

  • No

    Votes: 173 55.3%
  • Total voters
    313
When I first started trading years ago I would have said it wasn't gambling and that trading was just equivalent to repetitive short term "investing" because you have an edge and a positive mathematical expectation over the long run.

Now though I do think it's gambling because no matter how good the trading system... the future is always an unknown and even the casino can lose over extended periods.

So now I gamble with my money by using a positive mathematical expectation over the long run. I essentially "card count" the market with an edge better than I can get in Vegas playing blackjack. And there are so many various tables to play in the market that I can easily pick and choose and find the best dealers to play with based on the "characters" that participate in the various markets.
 
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.
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My reply is that it is not a statistical fact that a +ev bettor (whether in traditional gambling or the markets) will win over the longterm. There is no certainty. I was certainly a +ev poker player, but I had what at the time was an unrivaled losing run at SNGs (a type of poker game). Many were questioning whether I was +ev at all, although these were from mainly newer and poorer players, while the good players didn't question it at all. I was just one of the 'unlucky' to be caught on the negative side of extreme variance. I wasn't the only one to experience this, and some notable players had some awful runs at a similar time. It's just part of the game.

What is the game? Everything. We live in a world dictated by probability, and absolutely nothing is certain. At first I thought you were just debating definition, but now it seems you think probabilities don't apply over the longterm, i.e. you're completely ignoring variance.

I love the last phrase of your post: "that is a statistical fact". You are guaranteeing the outcome in an environment that is ruled by probability. Since the outcome in any one trade is not certain, then the outcome of any number of trades can't be certain. Therefore, certainty of success over the longterm cannot be guaranteed, and this logic is undeniable. All a +ev bettor does is give themself the best chance of success over the longterm, and this is obviously by making +ev bets continuously. This, however, will never guarantee their success.

I suppose if you acknowledge this, you'll justify your previous post by suggesting that it is so unlikely that it isn't worth considering. Well, it's far more likely than you realise, and not realising this is a serious flaw in your understanding.
 
gam·ble (gmbl)
v. gam·bled, gam·bling, gam·bles
v.intr.

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.
3. To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke.

In the sense of

1.a, traders are gamblers because the bet on an uncertain outcome, regardless the presence of an edge or methodology.

1.b, traders are gamblers if the market is a game of chance for stakes. I do not know the answer to this. It is probably not a technical issue but a matter of perspective.

2, traders are gamblers, because they take a risk in the hope of gaining money

3, traders are gamblers if we consider their acts potentially hazardous to their accounts and in certain cases to their health.

Therefore, we can conclude that traders are gamblers, although, contrary to common belief, gambling is not always a sensless and useless activity.
 
Hey, I have just designed a completely new and non-gambling trading system, it involves a dice and a coin, it trades once a day:

1. At the open I roll the dice. It will give the entry time, 1 means 10 am, 2 means 11 am, ...6 means 3 pm.

2. I flip a coin, head means long, tail means short. At the time determined in Step #1 I go long or short of ES futures according to the coinflip's result.

3. Automatic 5 pts target and 5 pts stop loss. Whichever gets hit first takes me out of the position. If neither is hit by 4 pm, I exit at the close.

Can someone write a code for this clearly scientific and non-gambling trading system and backtest it??? Many thanks....
 
Pek, how about this one, find a H&S pattern on a monthly/weekly chart and keep shorting neckline support with stops being say 1/50th of a realistically projected target. :)
 
Quote from intradaybill:

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

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.
3. To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke.

In the sense of

1.a, traders are gamblers because the bet on an uncertain outcome, regardless the presence of an edge or methodology.

1.b, traders are gamblers if the market is a game of chance for stakes. I do not know the answer to this. It is probably not a technical issue but a matter of perspective.

2, traders are gamblers, because they take a risk in the hope of gaining money

3, traders are gamblers if we consider their acts potentially hazardous to their accounts and in certain cases to their health.

Therefore, we can conclude that traders are gamblers, although, contrary to common belief, gambling is not always a sensless and useless activity.
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Good post, ib. But, sit tight bro. Some will come along here and string together a bunch of superfluous speech in an attempt to "prove" that your factual statements are wrong. Very entertaining.
 
What's entertaining is how you have now linked personal interpretation with a fact :)

Quote from BSAM:

Good post, ib. But, sit tight bro. Some will come along here and string together a bunch of superfluous speech in an attempt to "prove" that your factual statements are wrong. Very entertaining.
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Quote from Dackster:

If trading was to be gambling, all outcomes uncertain, then there would no such thing as 'insider trading', as the 'insider' would never be any wiser to an outcome no matter how much information they had.



Dackster.
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No one ever said that dishonest people are not also operating in the buying and selling of shares!

You have to be in the world of reality when you put your money at risk - if you don't want to lose that is!
 
Quote from MAESTRO:

Gambling is a layman term for the "Game of Chance".

Any time you put your money at risk you are taking a gamble!

Trading is a kind of a game where bets are consciously placed on the perceived higher probability outcomes of this multiplayer game.

Trading is nothing more than the act of buying or selling!

Trading is a typical non-cooperative game (John Nash) where each individual strategy depends on the success or failure of other people's strategies.

Trading is nothing more than the act of buying or selling!


Gambling is typically referred to as "uneducated guess activity" but for a professional gambler it is not so.

Gambling is when you place a bet, aka, a trade!

His/her decisions usually are driven by the prior knowledge of the probabilities distribution of a known game.

For the majority, trading decisions are usually driven by misinformation that is put in the public arena for a specific purpose!

Few have seen beyond this farcical illusion and proceed to take money out of the market by knowing when and how to act!
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Quote from MAESTRO:

I think it is not so much the ability of a trader to discover the information, but objective properties of the game to possess structural bias that can or cannot be discovered by a particular participant makes the difference.

Unless the coin is objectively unfair the ability to discover it may not exist
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What you, or anyone else thinks, is irrelevant!

If a person wants’ to take money from other people, then that person needs to know some very basic facts about trading the instrument/s that they have chosen!

When the basic facts are understood, the next step is to gain real "experience" with losing and winning!

The final step is not as many think and do!

Few are aware of it, and even fewer understand and practice it!
 
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