Is trading Gambling or not .."What say You" Vote here.

[SimpleTrades]

Quote from Don Bright:

Then we're right back to basics. I have a modified Baccarat system that will allow me to win 19 of 20 times, but the 20th time can eliminate all the profits. A modified Martingale system, fun when you consider comps, but can be costly.

So, back to the basic idea that all trading can be gambling. But is is the real "gamble" as in slots and craps or is it theoretically profitable gaming, like blackjack?

Hey, ES - check my request for help in the Prop trading forum, let me know what you think.

Everyone, help me out.

Don

I think HateTheRisk has a valid point about taking money off the table.

Consider this:

In the forex account that I work with, you can only lose the equity in that account. You can't be in "debt" to the "house"

So, if for each of the 10 trades, you deposit only as much as you are willing to risk for 1 trade, call it R, on average you will at worst lose R (kR if you need 10k trades to realize you 9/10 statistic).

At best you win something (W), leaving you with R + W. Withdraw W, and start all over again.

... and as I just told HateTheRisk in PM, now really do have to go.

 

[Don Bright]

Quote from bhardy307:

I think HateTheRisk has a valid point about taking money off the table.

Consider this:

In the forex account that I work with, you can only lose the equity in that account. You can't be in "debt" to the "house"

So, if for each of the 10 trades, you deposit only as much as you are willing to risk for 1 trade, call it R, on average you will at worst lose R (kR if you need 10k trades to realize you 9/10 statistic).

At best you win something (W), leaving you with R + W. Withdraw W, and start all over again.

... and as I just told HateTheRisk in PM, now really do have to go.

Again, back to playing poker. In a no-limit game, table stakes if you will, is it better to keep a "small stack" knowing that you can always re-buy with more, "off the table" money, sure. Can you win more when you have 4 aces over a guy with lotsa money, but only a full house? Of course not. '
You call an all in bet, for just a portion of your cash, limited win, limited loss. Always the same, right?

Back to the "is it gambling or not" ?

Don

 

[SimpleTrades]

Quote from Don Bright:


... limited win, limited loss. Always the same, right?

Sortof. This bigger player beats you statistically since they have the opportunity to have many, many more, " limited win(s), limited loss(es)". The 9/10 win ratio is realized best through the largest possible number of trades. Law of large numbers. The bigger player also beats you because their fee ratio (fee per trade) is much lower.

If through an "infinite" number of trades you are able to construct a win ratio of 9/10, you aren't gambling because the result is a certainty.

Trouble is, the average person doesn't have the luxury of an "infinite" number of trades. Therefore, while we are small players there is a gambling component.

I guess I just contradicted myself.

 

[HATEtheRisk]

Quote from Don Bright:

Again, back to playing poker. In a no-limit game, table stakes if you will, is it better to keep a "small stack" knowing that you can always re-buy with more, "off the table" money, sure. Can you win more when you have 4 aces over a guy with lotsa money, but only a full house? Of course not. '
You call an all in bet, for just a portion of your cash, limited win, limited loss. Always the same, right?

Back to the "is it gambling or not" ?

Don

Tell me Don,

why cant i constantly win in poker, i play everyday on pokerstars.

The luck always beats me in the end and i get exhausted.

I also cant stand more aggressive player as i am.

I am not so bad, i have won 2 tournaments with the 1. place, and was some times under the first 20 winners. from 5.000 players or so.....
-------------------
The simple difference, why i constanly win on trading and cant do it on poker, is "that my trading has no luck involved".

More detailed, is that poker has the worst riskmanagment opportunities, what exist. In trading you cant lose anything anymore, after you were right a little bit of your overall beliefs - then using a trailinstop and take out the risk of the trade.
Who cares if you get stoped out, with a little profit, as long you didnt lose anything.

Also in trading you can close and add to a trade at anytime, you want.

In poker, once the money is in the pot, its gone, you have to win the pot or you lost it...........

My trading is like playing poker, with knowing the cards of the other players and can use a trailingstop on my bets.
Imagine that.

Also, in trading you can not bluff.
And you do not play against other people, you only play against the lazy side inside yourself.

Best

 

[HATEtheRisk]

Quote from bhardy307:

Sortof. This bigger player beats you statistically since they have the opportunity to have many, many more, " limited win(s), limited loss(es)". The 9/10 win ratio is realized best through the largest possible number of trades. Law of large numbers. The bigger player also beats you because their fee ratio (fee per trade) is much lower.

If through an "infinite" number of trades you are able to construct a win ratio of 9/10, you aren't gambling because the result is a certainty.

Trouble is, the average person doesn't have the luxury of an "infinite" number of trades. Therefore, while we are small players there is a gambling component.

I guess I just contradicted myself.

nope, not infinite.

If you would want to be accepted in my 9/10 club.

you must make it with 20 trades.
with 5/10 trades, risk/reward minimum 1 : 2.
with 2/10 trades, risk/reward minimum 1 : 1.
with 1/10 trades, risk/reward minimum 1 : 0,5.

20 trades is all you got. If you cant make it, call me when you want to try again.....

 

[SimpleTrades]

Quote from HATEtheRisk:

nope, not infinite.

If you would want to be accepted in my 9/10 club.

you must make it with 20 trades.
with 5/10 trades, risk/reward minimum 1 : 2.
with 2/10 trades, risk/reward minimum 1 : 1.
with 1/10 trades, risk/reward minimum 1 : 0,5.

20 trades is all you got. If you cant make it, call me when you want to try again.....

Yes, but you know what I mean, don't you? When you backtest your strategy, and find that you have a 9/10 win ratio over a period of 10 years, you do realize that if you were to randomly select 1 year in that period, you'd likely find that your win ratio was much less than that for that period of time. Flip a coin 10 times, and you may get heads every time; Flip a coin 100 times, and you'll get closer to 50/50; Flip it 1 million times, and it will be almost exactly 50/50.

 

[HATEtheRisk]

Quote from bhardy307:



Yes, but you know what I mean, don't you? When you backtest your strategy, and find that you have a 9/10 win ratio over a period of 10 years, you do realize that if you were to randomly select 1 year in that period, you'd likely find that your win ratio was much less than that for that period of time. Flip a coin 10 times, and you may get heads every time; Flip a coin 100 times, and you'll get closer to 50/50; Flip it 1 million times, and it will be almost exactly 50/50.

Yes i know what you mean, but i do not agree with it.

Actually when i am backtesting my strategies, i have a 10/10 ratio, only the profits ranking is different.

9/10 is only because everything can happen anytime.....

If you analyze statistic for one year or for 10 years, makes no differnece, its just added data.

You must realize, that i am always only bet on high possible odds scenarios, every single time.

So the number of the trades i analyze makes no difference in the result of the statistically outcome. no, but it proves the point that the strategies are worked for a long time and are very strong in their repeating power. The more data i include to the statistic, the better the statistic gets.

(This was my last post here. I am tired of people who insulting me. Dont need this.)

Good luck, bhardy

 

[SimpleTrades]

@HateTheRisk.

Insulting you? When? Sorry, that was never my intention.

Thanks for your help.

 

[HATEtheRisk]

Quote from bhardy307:

@HateTheRisk.

Insulting you? When? Sorry, that was never my intention.

Thanks for your help.

No, not you.

You are allright, buddy.

Thank you for the nice conversations.

Read my motivation thread in psychology, if you feel bad.
I do sometimes and i makes me smile .......

Get urself in a Rocky Balboa mood and make money + safe money.

U can do it, u will do it.

I know it.

You are just, how i was a few years ago.

In a few years you can be a millionair.

Best advice ever: Only trade the best setups. The best of the best, is just good enough. But, then bet huge on it.
Take profits if price did what you wanted.
Dont be greedy, dont have fear.

Get what belongs to you.

Good luck

(I am off, last post, seriously)

Bye

 

[Don Bright]

Quote from bhardy307:



Yes, but you know what I mean, don't you? When you backtest your strategy, and find that you have a 9/10 win ratio over a period of 10 years, you do realize that if you were to randomly select 1 year in that period, you'd likely find that your win ratio was much less than that for that period of time. Flip a coin 10 times, and you may get heads every time; Flip a coin 100 times, and you'll get closer to 50/50; Flip it 1 million times, and it will be almost exactly 50/50.

Remember backtesting doesn't work, cannot by simple environmental considerations. No way to replicate all the possible outside criteria, 9/11, Greece, Fed rates, BK filings, reaction to earnings (how many "super earnings" have resulted in price drop?), etc.

Backtesting may tell you what cannot work, but in no way can tell you what will work going forward due to outside elements.

Don