Interesting point about gambling RN.
Traditional gambling is often just a simple (ie. binary) bet on an uncertain and unknowable outcome, or some similarly very linear process. With any more complex / chaotic process, people wouldn't feel comfortable gambling. Instead, they do, all the while being happily fleeced by the house!
Trading is a different beast. People are still fleeced though, but the experience is a more gloomy one for the unexperienced.
Mathematically you could try to state that trading is a series of bets during the passage of time, ie. a growth- or log-timeseries. The problem is that the real results of trading depends on execution mechanics, gaps and boundless potential for price volatility over any kind of time period. This, as well as Murphy's Law, can at any time royally screw you over, warping anything, including yourself, in the process. Therefore such a theoretical axiom is really very misleading in practice, and can quickly lead to attaining anti-edges (ie. by information lag, inaccuracies and simple mistakes). Also, a theoretical growth formula based on unknown chaotic processes is by itself quite unhelpful, as a practical and well-defined trading process.
Uncertainty means you can never truly know future results.
Risk means you may accumulate losses from being on the wrong side of the market.
Risk Management often means closing small losses, to survive to fight another day, as well as being able to manage larger positions safely (position sizing).
So: Trading happens when YOU manage positions comfortably, between uncertainty and risk!
By being the house, I assume the universe is not putting in too much effort to get you!
The exit is left as an exercise to the reader.
Traditional gambling is often just a simple (ie. binary) bet on an uncertain and unknowable outcome, or some similarly very linear process. With any more complex / chaotic process, people wouldn't feel comfortable gambling. Instead, they do, all the while being happily fleeced by the house!
Trading is a different beast. People are still fleeced though, but the experience is a more gloomy one for the unexperienced.
Mathematically you could try to state that trading is a series of bets during the passage of time, ie. a growth- or log-timeseries. The problem is that the real results of trading depends on execution mechanics, gaps and boundless potential for price volatility over any kind of time period. This, as well as Murphy's Law, can at any time royally screw you over, warping anything, including yourself, in the process. Therefore such a theoretical axiom is really very misleading in practice, and can quickly lead to attaining anti-edges (ie. by information lag, inaccuracies and simple mistakes). Also, a theoretical growth formula based on unknown chaotic processes is by itself quite unhelpful, as a practical and well-defined trading process.
Uncertainty means you can never truly know future results.
Risk means you may accumulate losses from being on the wrong side of the market.
Risk Management often means closing small losses, to survive to fight another day, as well as being able to manage larger positions safely (position sizing).
So: Trading happens when YOU manage positions comfortably, between uncertainty and risk!
By being the house, I assume the universe is not putting in too much effort to get you!
The exit is left as an exercise to the reader.
