Explain to a 5 year old, how is trading different from gambling?

Quote from CaptainObvious:

Casino cheats are thrown out, sometimes jailed....
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Good point;
same way with other gambling . Never had a policeman watch my trading/bust me. Happens all the time to gamblers.

Having done all 3 ,trading/investing verses gambling as a teen;
while all 3 involve risk .

Gambling tends to be much more against the law. As Mr William Eckhardt said it wasnt a bet, it was a disagreement between him & Rich Turtle Dennis [paraphrase]

I like the silver state quote'' there is a thin blue line between you & danger. '' Thats a blue moving average for the trader;
for the gambler that quote came from the Las Vegas police dept..LOL

Had a silver state gambler take a risk on me & loan me his exspensive shotgun in a high volume dove shoot in Argentina;
that was risk, not a gamble.............

:D Not all gambling is illegal;
in Tn they legalized the lottery. Dave Ramsey calls that a stupid tax on people that can not do math.

Also Casinos, in the rather interesting blackjack TV series;
call any kind of frequent winners' 'cheats'' /kick them out Thats not what stockbrokers call them they call them winners/ bring them in.
 
Over the last 5 years, at least a quarter of the people I know have been fired, furloughed, layed off, demoted, shifted to part-time, lost all or part of their pension, had their house foreclosed on, got harrased by bill collectors, etc. The one thing they all had in common is that they worked for someone other than themselves.

There's no bigger gamble than putting your fate in somebody else's hands.


Quote from Lawrence Chan:

Wrong topic to start with.

Try explain to 5 year olds that doing a regular job is not gambling.

You may not get paid from a regular job because,

1. the place you are working at is going out of business and you do not know that is true

2. the pension you saved with the firm does not really exist

3. you can be fired any time on any ground

4. you are liable for many things and be sued for money when dealing with coworkers and clients

The paycheck is not as secure as most people think.

Of course there is McD to work for so that the paycheck has a better guarantee but ...

=P
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When I was in college one of my math professors used to call the lottery a "stupidity tax... The dumber you are the more you pay."


Quote from murray t turtle:

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in Tn they legalized the lottery. Dave Ramsey calls that a stupid tax on people that can not do math.
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Yeah but the imbecile that gets lucky can buy and sell Ramsey.

My suggestion to all is, tap out on lottery tickets, then claim you're an impoverished victim of society if you lose it all.

sort of like what the banks did, and what the illegals do every day.

I cringe whenever I see a druid from south of the border dragging 6 of their get along.
 
A person who enters a casino is gambling (with the exception of card counting). But is the casino gambling?

A casino does not really gamble, although the outcome of every roulette wheel spin is uncertain even for the casino, over several hundred wheel spins the casino is expected to nearly always be ahead.

The casino can be sure about future outcome (assuming the wheel doesnt develop a bias).

But lets say you have a trading edge, if you net profits over a very high number of small low risk trades using your edge (say 500 or 1000 trades or more), then you can safely say were not gambling.

Unlike the casino, who can also be sure about the future, we as traders can only say this about the past.. we were not gambling in the past as our edge proved it self in real trading but trading edges are not guaranteed to work in the future (unlike a roulette wheel).

We cant mathematically prove our trading edges like a casino can trivally do. However this is good thing, as otherwise the edges would no longer exist!

So basically as traders we try to be the casino and not the gambler, we can never prove this going forward, but if we do make money then we have proof that what we did was not gambling.

But we cant make claims about future results.
 
When the U.S. dollar has declined 18% in the last year only the fools, the poor, the uneducated and ignorant are not trading.

In today's economy conditions, especially those here in the U.S., trading is as much gambling as is not trading. I trade every day and I never consider it gambling. I am simply exchanging a portion of my account for dollars that I know are going to decline in value for assets that I believe are most likely going to increase in value.
 
Quote from Millionaire:

A person who enters a casino is gambling (with the exception of card counting). But is the casino gambling?

A casino does not really gamble, although the outcome of every roulette wheel spin is uncertain even for the casino, over several hundred wheel spins the casino is expected to nearly always be ahead.

The casino can be sure about future outcome (assuming the wheel doesnt develop a bias).

But lets say you have a trading edge, if you net profits over a very high number of small low risk trades using your edge (say 500 or 1000 trades or more), then you can safely say were not gambling.

Unlike the casino, who can also be sure about the future, we as traders can only say this about the past.. we were not gambling in the past as our edge proved it self in real trading but trading edges are not guaranteed to work in the future (unlike a roulette wheel).

We cant mathematically prove our trading edges like a casino can trivally do. However this is good thing, as otherwise the edges would no longer exist!

So basically as traders we try to be the casino and not the gambler, we can never prove this going forward, but if we do make money then we have proof that what we did was not gambling.

But we cant make claims about future results.
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Damn it. This is almost exactly the point I was about to make.

With every hand/game played... the gamblers are gambling, while the casinos are investing.
 
Explain to a 5 year old, how is trading different from gambling?

It's not. Don't let any fancy persuasions allow you to believe otherwise.

When you risk money on any uncertain outcome, it constitutes a gamble.
 
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