Trading and gambling are often viewed interchangeably. Most People think that trading is a form of gambling Because it involves predicting what will happen (spoiler: it isn’t).
The reason for this view is probably because many people deal with the financial markets without any real knowledge and without actual knowledge of what they are doing, reducing everything to a mere “click and buy (or sell)”.
Sometimes the people who are very successful in the casino have achieved great success in the trading industry. In fact, the list of successful hedge fund managers who gamble is also a really long list.
In this article, we will look at some of the similarities and differences between a gambler and a dealer.
What is trading?
Trading is the practice of buying and selling financial assets with the aim of making a profit. Traders, unlike investors, very short horizon. This means that they are usually not interested in buying the asset and holding it for a few days or weeks. This is a common similarity between a dealer and a gambler.
There are many types of assets in day trading. In general, the most common ones are StoresAnd the goodspointers, Exchange Traded Funds (ETF) and bonds.
Within these categories, there are Other master slides Such as major and minor currency pairs, industrial and precious metals, corporate and government bonds, and technology and industrial stocks.
What is gambling?
Gambling is a process where A person bets their money in a game and expects a higher return when he goes on his way. There are several types of gambling. First, there Sports bettingwhich involves placing a bet that a certain team will win, lose, draw or score a certain number of games.
Second, there is casino games in which people participate. Some of the most popular types of casino games on the market are card gameAnd the Roulettevideo Pokersapphire wealth among others.
Third, it is also possible online gambling. In fact, during the pandemic, most of the companies that operate casinos like MGM Resorts, Las Vegas Sands, Wynn Resorts and Boyd Gaming entered the online casino industry.
Related “ Why do poker players become successful daily traders?
This happened because most of these companies had to close their operations because they were considered nonessential.
As with trading, Gambling style can be different. Some do it with little money and for fun, while others make it a real business. In short, you can go from the mindset of “let’s see if I win something” to the mindset of “let’s see how much I can win”.
Similarities Between Gambling and Trading
there Some common points of contact between gambling and commerce. First, the two strategies contain a 50-50 chance to make money and lose.
When a trader opens a trade, there is usually a 50-50 chance that his trades will be profitable. No matter how accurate our analyzes are.
The same goes for gambling. For example, in sports betting, if you bet that a particular team wins, it can either win or tie. Indeed, sometimes the percentages are less than 50% (in roulette, in addition to black and red, there is also a green zero)
secondly, returns Trade and gambling It can be really high. For example, in sports betting, it is possible to wager $10 and win thousands of dollars. The same goes for trade. In the past, we have seen many people grow their accounts from almost nothing to millions.
Third: in gambling and commerce, The chances of success are usually small. In trading, more than 80% of people who start doing it fail. Only a small percentage of traders eventually reach the industry. The same is true for people who start gambling. In most cases, less than 5% of people who start gambling succeed.
How to succeed in trading (and gambling too)
Another similarity between gambling and trading is that there are similar steps that you need to follow to become a successful professional in both. Let’s analyze the most relevant similarities.
Training is important
One of the most important similarities between trading and gambling is that Training plays an important role in both.
To Succeed in trading, you need to learn a lot About many things like the different types of assets in the market, usage strategies, risk management techniques, money management techniques.
Related “ Why do day trading
The same goes for gambling. Historically, people who gamble without first learning about the industry usually failed. you need to learn More about Different types of gambling marketsAnd the Risk Management When gambling, how to gamble with different types of individuals.
Fortunately, there are many free resources for gambling and trading. Some of these exercises are on popular platforms like YouTube and Vimeo. You can also enroll in courses on platforms such as Udemy and Coursera.
start small
Another way to achieve success in gambling and trading is start small. This means that you do not have to fully participate when trading and gambling. In both, you should always Start with a small portion of your money and then grow your account over time.
This simply means that you should always risk money that you can afford to lose, and adopt tactics combined between risk and reward. For example, if you have $100,000, you simply have to start around $3,000. Risking a lot of money early in your career will result in unimaginable losses.
Risk Management
As mentioned above, both trading and gambling are risky methods of making money. as a resultt important for you to consider it presence of Highest standards of risk management.
There are many risk management strategies that you should use. For example, you should adopt strategies such as placing a stop loss and reducing leverage when day trading.
In gambling, you should adopt strategies such as not over-gambling, making losses early, and playing games that you are familiar with.
Guidance
Guidance is the invaluable basic thing that will help you succeed in trading. Having a good guide Whoever has been there and done it will help you identify opportunities, reduce risks and become a comprehensive trader and gambler.
In terms of trading, one of the best ways to get excellent mentorship is to Join an existing business office. Something we at DTTW™ are experts at.
You must have a good plan
We say it all the time, but trading without a good plan behind you is like throwing a coin to the bottom of the well and hoping for good luck. It might work once or twice, but it’s not sustainable.
Creating a good plan requires:
This also applies to casino players, at least those who want to do it in a demonstrable way. Knowing how and when to be able to place higher bets, have a maximum spend, and other similar tactics is critical to not losing everyone in a matter of minutes.
Managing losses and emotions
This aspect is often underestimated, but it is important for someone who wants to succeed. And the two are related. No trader – and no casino player – can have an endless winning streak; Sooner or later the losses will come. Most likely soon, and they won’t be isolated either.
Here, being able to maintain calm and clarity in these situations can save your account! Too often we have seen traders (and gamblers) react to some losses by doing everything they can to recover quickly… only to lose more money.
But the emotions to pay attention to are not only negative ones. This is correct! Even the positives can be harmful.
Having a large profit streak can result in a trader wanting to continue trading, even on assets about which he or she does not have complete information, thus exiting their trading plan. This is known as excessive confidence bias.
The same applies to the casino player. The desire to keep playing and boost one’s luck often results in losing everything they’ve won (and more).
Summary – Trader vs Casino Player: Which is better?
in DTTW, We believe that trading is much better than gambling. For anyone, there more markets that you can use in trade. These markets include stocks, commodities, and indices. Sure, you will often find a market that fits your style.
secondly, Trading can become a full time job. We have seen many people who started their trading career without much money and their accounts have grown naturally over time.
Moreover, trading can lead to you being a successful hedge fund manager as people give you money to trade on their behalf. This is almost impossible in the gambling industry.
Useful external resources
- Is trading luck or skill? Is the stock market a casino? – cunning fin
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