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

[gnome]

What gambling and the markets have in common, (a) risk of loss, and (b) uncertainty of outcome.

Where they differ is "probability of outcome". In gambling, the odds are fixed against the player, and there's nothing the player can to to put the odds in his favor (counting cards in black jack a notable exception... but then, that's why the casinos don't allow it.)

In the markets, the trader can possibly put the probability of outcome in his favor by his knowledge and behavior.

 

[Thunderdog]

Quote from gnome:

What gambling and the markets have in common, (a) risk of loss, and (b) uncertainty of outcome.

Where they differ is "probability of outcome". In gambling, the odds are fixed against the player, and there's nothing the player can to to put the odds in his favor (counting cards in black jack a notable exception... but then, that's why the casinos don't allow it.)

In the markets, the trader can possibly put the probability of outcome in his favor by his knowledge and behavior.

Your argument does not necessarily distinguish trading from gambling. It simply suggests that trading is a form of gambling with potentially better mathematical outcomes.

Trading actually has a downside in relation to casino gambling in one limited respect. In the casino, you can essentially determine the exact probability of the outcome, although that probability may not be in your favor. On the other hand, there is no such clear probability distribution when trading the markets. The markets are shrouded in uncertainty, that less attractive and numerically indeterminate cousin of probability. I believe that anyone who thinks he is trading the markets with numeric specificity is kidding himself. What some traders view as the probability distribution of possible outcomes on future trades is only a statistical distribution of past trades which may or may not only have a nodding acquaintance with future performance. (Consider overly tight curve fitting as an extreme example in this regard.) While the markets may approximately repeat themselves from time to time and while some trading methods may be fairly reliable, they lack actual numeric certitude in respect of future performance. At best, I think that the trader can go with "the balance of probability," which is more of a bias than anything else.

Please don't misunderstand me, though. I have never been to a casino and I have no desire to visit one any time soon. However, I do trade.

 

[gnome]

Quote from Thunderdog:

Your argument does not necessarily distinguish trading from gambling. It simply suggests that trading is a form of gambling with potentially better mathematical outcomes.

Trading actually has a downside in relation to casino gambling in one limited respect. In the casino, you can essentially determine the exact probability of the outcome, although that probability may not be in your favor. On the other hand, there is no such clear probability distribution when trading the markets. The markets are shrouded in uncertainty, that less attractive and numerically indeterminate cousin of probability. I believe that anyone who thinks he is trading the markets with numeric specificity is kidding himself. What some traders view as the probability distribution of possible outcomes on future trades is only a statistical distribution of past trades which may or may not only have a nodding acquaintance with future performance. (Consider overly tight curve fitting as an example in this regard.) While the markets may approximately repeat themselves from time to time and while some trading methods may be fairly reliable, they lack actual numeric certitude in respect of future performance. At best, I think that the trader can go with "the balance of probability," which is more of a bias than anything else.

Please don't misunderstand me, though. I have never been to a casino and I have no desire to visit one any time soon. However, I do trade.

This must be another of those anal "semantic arguments".

I guess it all boils down to the definition of "gambling". My understanding is that it to "risk loss while attempting to prevail against odds which are fixed and against you".

 

[Thunderdog]

Quote from gnome:

This must be another of those anal "semantic arguments".

I guess it all boils down to the definition of "gambling". My understanding is that it to "risk loss while attempting to prevail against odds which are fixed and against you".

That definition is your own and you are certainly entitled to it. However, you will not find this definition in any standard dictionary or other reference material in connection with the common use of the English language. The question then arises: which one of us is actually engaged in a duel of semantics? If I am not mistaken, I was the one trying to avoid making semantic distinctions.

 

[dandxg]

It is only gambling if you make, gamblers IMO put there quarter in a slot and see what happens, a good trader uses their edge and discipline to make money, gambling doesn't offer an edge ( unless you count cards )

 

[geowalker]

Quote from Accountant_23:



Anything where you do not know the outcome 100% is gambling. Also, anything that has the possibility of losing money is gambling. Therefore trading is gambling, poker is gambling, and blackjack is gambling. Can you have skills in these three professions? Yes and you can make a damn good living out of it if you are good. Any trader that thinks what they do is not gambling may be in denial.

Accountant

agree

 

[traderob]

Quote from gnome:

This must be another of those anal "semantic arguments".

I guess it all boils down to the definition of "gambling". My understanding is that it to "risk loss while attempting to prevail against odds which are fixed and against you".

In that case playing poker is not gambling.

 

[PohPoh]

Quote from Samson77:

LOL- I wish trading was as easy as gambling somtimes.

I made $5500 last week in a poker tournement with a $10 buy in!

You do the math on that return in 4 hrs.

In all honesty trading is much better then gambling because unlike being a skilled poker player who relies on luck a lot of the time, trading is hard work, knowledge and disipline.

Trust me I have done a lot of both and trading and gambling are VERY different.

Did you play in a 1250 person tourney and win??

 

[gnome]

Quote from roberk:

In that case playing poker is not gambling.

That's what the Texas Supreme Court ruled in a landmark case, ruling that "poker is a game of skill".

 

[gnome]

Quote from Thunderdog:

That definition is your own and you are certainly entitled to it. However, you will not find this definition in any standard dictionary or other reference material in connection with the common use of the English language. The question then arises: which one of us is actually engaged in a duel of semantics? If I am not mistaken, I was the one trying to avoid making semantic distinctions.

I contend that the common dictionary's definition of gambling is both simplistic and imprecise.

I also make the observation that this question is often asked and much time is devoted to its discussion on ET. However my personal experience among traders who have made signficant money in the markets has been that this question is not pondered at all. In fact, I suspect it's not even considered.