Gambling
- Thread starter sps_45
- Start date
Because you can mathematically define your edge, and barring mistakes it is certain you will win if you play enough hands. Plus if you are young and unattached you get to live the live of a casino high-roller while making the $$$. Many pros also join teams to lower their risk. If 5 guys with 100k each band together each can size their bets as if they had 500k.
It is definitely not for everyone, and it doesn't scale well. At some point you have more money than the casino will let you bet so you have to get into other investments.
Bob's technical advice is good but I wouldn't put a lot of stock in him personally. He plays both sides of the fence when he consults for the casinos. Much of his 1 MM came from one or two large jackpots. It's not like he won it $200 at a time.
His WinPoker product (actually programmed by Zamzow) is essential for practice.
Traveler
A well written post, Walker. But being a poker player myself, I disagree that profits are guaranteed even with perfect play. The reason being is that if you are sitting at a table with other agents who play a perfect game, it comes down to bluffing , reading, and luck. Consistent profits are possible only when there is a high ratio of amateurs to professionals. In my opinion, that is distinctly similar feature of trading. Fortunately in both cases, that ratio is very high indeed.
-segv
The reason that many gamblers will likely make poor traders is that their risk-seeking utility curves encourage them to undertake negative expected value activities -- they gladly accept the option to win $1000 with a 1-in-1000 chance or lose $2 with 999-in-1000 chance (which has an expected loss of almost $1 on each play). For a gambler the slightest chance to win big outweighs the high chance of a loss -- just think about people pay their stupidity tax (a k a the lottery).
I do agree that trading requires risk tolerance, but risk-seeking behavior will bias one to take bad trades just for the thrill of a potential win. The best traders are probably risk averse but very shrewd about finding positive expected value situations.
I'll also add that trading has less resemblance to most games of chance than many people think. In games of chance, the rules are quite fixed and the odds can be calculated a priori. In trading, there's no guarantee that a setup pattern that worked 99-out-of-the-last-100 times in the past will always work 99% of the time in the future.
This tendency for the market to change the rules without informing the participants makes trading far crueler than gambling.
I do agree that trading requires risk tolerance, but risk-seeking behavior will bias one to take bad trades just for the thrill of a potential win. The best traders are probably risk averse but very shrewd about finding positive expected value situations.
I'll also add that trading has less resemblance to most games of chance than many people think. In games of chance, the rules are quite fixed and the odds can be calculated a priori. In trading, there's no guarantee that a setup pattern that worked 99-out-of-the-last-100 times in the past will always work 99% of the time in the future.
This tendency for the market to change the rules without informing the participants makes trading far crueler than gambling.
Sometimes I think the Megabucks is like the black swan in trading. Video poker is like option trading with predefined risk. I do not like table games, the tips increase the business expense. A guy wrote a book recently about poker is a cheating game, etc.
Gambling is not as thrilling for me as trading. I like the idea of making lots of money & no one knows me
Gambling is not as thrilling for me as trading. I like the idea of making lots of money & no one knows me
I have monitored this thread for a while and I am puzzled that no one has mentioned sports gambling. I was a sports gambler in the eighties before I ever thought of trading stocks. There are some things in my sports gambling experience which are helpful in trading.
1. First and foremost, your postion in trading and sports gambing reflects an opinion.
2. You can approach your positions using technical and fundamental analysis.
3. There is a lot of psychology involved. It helps to have a contrarian bent in sports gambling as it does in trading.
4. The outcome of your risk is not always a gain or loss because you can have pushes. Trading is not always a gain or loss propostion and you can have flat outcomes.
5. Although I have never gambled in any form other than sports gambling, the money management skills necessary to be successful seem similar in both pursuits. The most famous money management trap for sports gamblers was Monday Night Football. Gamblers would load up trying to recover Sunday's losses in one game.
6. I felt some games were manipulated or fixed, usually by officiating. As a contrarian, you can use this belief in your favor. In trading, I have no proof of market manipulation which may or may not be legal manipulation, but I trade as though it could be a factor.
7. People who lost in sports gambling often blamed their bookie, and after reading this forum, I believe that those who lose in trading often blame the broker.
1. First and foremost, your postion in trading and sports gambing reflects an opinion.
2. You can approach your positions using technical and fundamental analysis.
3. There is a lot of psychology involved. It helps to have a contrarian bent in sports gambling as it does in trading.
4. The outcome of your risk is not always a gain or loss because you can have pushes. Trading is not always a gain or loss propostion and you can have flat outcomes.
5. Although I have never gambled in any form other than sports gambling, the money management skills necessary to be successful seem similar in both pursuits. The most famous money management trap for sports gamblers was Monday Night Football. Gamblers would load up trying to recover Sunday's losses in one game.
6. I felt some games were manipulated or fixed, usually by officiating. As a contrarian, you can use this belief in your favor. In trading, I have no proof of market manipulation which may or may not be legal manipulation, but I trade as though it could be a factor.
7. People who lost in sports gambling often blamed their bookie, and after reading this forum, I believe that those who lose in trading often blame the broker.
Good, good reading.
Regarding fixed outcomes, there was in Brazil a huge scandal related to manipulated games in their national soccer championship last year. You can read about it, in english of course, here:
http://news.bbc.co.uk/sport2/hi/football/europe/5172576.stm
You can also find other related articles there.