Is trading Futures gambling?

[Lloyd W. Coutee]

Because the futures market tracks so many different indexes and commodities, it is extremely complicated.
It is important that you thoroughly understand the market which underlies the futures contracts that you are trading. Furthermore, because of the leverage they employ, trading futures can be extremely dangerous, so it is also very important that you employ rigorous risk management to your futures trading program. Furthermore, studies have shown that as many as 90% of futures traders lose money, so you should never trade futures with capital you cannot afford to lose.

 

[Scataphagos]

Because the futures market tracks so many different indexes and commodities, it is extremely complicated.
It is important that you thoroughly understand the market which underlies the futures contracts that you are trading. Furthermore, because of the leverage they employ, trading futures can be extremely dangerous, so it is also very important that you employ rigorous risk management to your futures trading program. Furthermore, studies have shown that as many as 90% of futures traders lose money, so you should never trade futures with capital you cannot afford to lose.

If you're stupid, trading futures could be gambling.

There is nothing about "futures" which makes them any more-or-less "gambling" than any other form of risk-taking in the marketplace.

I get the feeling you don't understand the definition of "gambling". Well, here it is. "Gambling = attempting to prevail when the mathmatical odds are against you and cannot be altered to be in your favor*". There are 2 aspects to gambling... (1) risk of loss, and (2) probability of loss. Other than the aspect of "risk of loss", playing/trading the financial markets have NOTHING IN COMMON WITH GAMBLING.

*EXAMPLE... Roulette.... The "odds of winning are either 37:1 or 38:1, depending upon whether the wheel has "0 Green" or "00 Green"... but the payoff is only 35:1 when you win. Those odds are "against you" and there is nothing you can do to put them in your favor. NONE OF THAT IS APPLICABLE TO TRADING THE FINANCIAL MARKETS. You can put the odds HEAVILY in your behavior based upon what you know and how you behave. Or, you can lose your ass in a blink... not because "it's gambling", but because you didn't know what you were doing in the first place.

(BTW Lloyd... you appear to be a "rookie, looking for wisdom on ET". Sorry, but you ain't gonna find it.... my posts excluded, of course. )

 

[speedo]

We are speculators and as speculators, we make markets and provide liquidity. In doing so, we also mitigate risk for more conservative market participants such as investors and hedgers. In return for providing liquidity, making markets and absorbing risk, we reserve the right to make a profit. Scataphagos is correct, any capital transaction involves risk, we reside on the higher risk/higher reward end of the spectrum.

 

[Scataphagos]

"... we reside on the higher risk/higher reward end of the spectrum...."

___________________________________________

Perhaps you do, but I don't. I prefer the "lower risk, higher reward/probability" side of things.

Personally, I'm a conservative investor. I try to limit my risks to when I think I've "got the nuts".

 

[speedo]

That's what makes it a market.

 

[Scataphagos]

That's what makes it a market.

BOTTOM LINE... to be a successful investor, all "theories" aside... you need to long something that's going up, and to be short or out when things are going down.... however you get there.

My approach is "Price Chart TA". All who disagree are WRONG!

 

[carrer]

If you are betting the farm and without any positive expectancy on your trading method/strategy, that's called gambling.

If you are putting the money in the index futures and wait for 10 years for it to appreciate before selling it, that's called investing.

If you enter and exit the futures market based on tested strategies which have positive expectancy with proper money management, that's called trading.

 

[speedo]

Charts are fractal in nature. Saying you what to be long when the market is going up is meaningless without temporal context. What may be an uptrend in one time frame can be a down trend in another. There will always be time frame conflict so one has choose which time frame(s) to trade/invest. I can be long on ES in the 3000 tick and be with trend while someone else may be short in trend on an hourly or daily.

 

[Q3D]

Have futures markets now evolved into interconnected HFT-run markets with cross-correlations of cross-correlations and HFT-based reactions to non-events to the point that price is determined by a stochastic process with variables and factors the human mind cannot rationally comprehend (aside from superstitiously creating patterns from randomness) or consistently take advantage of at the HFT 15 minute and less timeframe? YES

 

[Handle123]

Because the futures market tracks so many different indexes and commodities, it is extremely complicated.
It is important that you thoroughly understand the market which underlies the futures contracts that you are trading. Furthermore, because of the leverage they employ, trading futures can be extremely dangerous, so it is also very important that you employ rigorous risk management to your futures trading program. Furthermore, studies have shown that as many as 90% of futures traders lose money, so you should never trade futures with capital you cannot afford to lose.

You sound like an Introducing Broker. Anything when you put up money looking to gain is risky, whether flipping houses, financial markets, restoring cars or betting on the Cubs(although I have won much more than lost cause of the Goat). Leverage means nothing, you know up front what each tick or pip costs, no different than trading cents. If you don't work your arse off, you become bait and people who know how to trade well are the Sharks of the world, it has never changed since start of mankind.

There are always those who have not figured out how to adapt that will say it is a different reason why they lose like HFT, government reports, lying financial statements, internet routing slow, fact is people don't work smart enough to play the game right.