I think of gambling is based on random chance and the house always has an edge. I think it poorly describes trading crypto in any timeframe since pricing is not random and there isn't a house that always wins in the longer term. The high volatility means it's risky and people associate high risk with gambling, but that does not make them the same thing.
The harsh truth is that there is a "house" in trading too, which has a sort of house edge over the majority of traders. If we think of crypto as a zero-sum game, which is a pretty close approximation anyway, then those who can't lose make the rest of the pack lose. There is simply no third option, and the effect on your chances of success in trading is essentially the same as the one produced by the house edge in gambling. |
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Trading is not gambling at all. I don't consider Poker gambling even, but trading is far less like gambling than poker. First of all, it's not a game of chance, the results are based on real life things, speculation, news, real money transactions. They're not based on chance, on dices, on wheels and randomness.
Not to sound picky or nagging, or anything, but did you read the OP? If you do not belong to the group of money takers and profit makers, you will be losing most of the time until you have nothing left. I it was pretty easy to make money in crypto while it had been universally rising but in mature markets like currency or commodity markets it is next to impossible for couch traders to make money consistently over longer terms because you can earn only by taking money from someone else. And that someone else will be yourself in the majority of cases. |
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Well you are right, when we do trading we take the risk of either failure or success, it's like you bet in a casino using all your capital. But what was different when you trade is that there are lots of option you can choose from and you can study first the market to somehow make a good assumption of which will likely to appreciate unlike in gambling that is absolutely clueless but just a wild guess.
But how many traders actually conduct their "due diligence"? Note that it is not just about making some studies as if just that could earn you profits. It is more about making assumptions in a really constructive way. I have already given an example why this distinction makes the difference but it is kinda worth repeating. Imagine that you are tossing a coin, though you don't know anything about your chances or how random the outcome is. You may build complex theories allegedly predicting the outcomes but how useful would they all really be? It is the same with trading. You don't know whether your theories will be of any merit, while you may still be gambling. |
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The biggest mistake which new traders make is that they purchase some coins thee price of which increases quickly due to FOMO without actually knowing that its being pumped.
Some times the mistake what bitcoin traders do is that when they see bitcoin price falling,they wrongly predict it that bitcoin price would crash and they short their bitcoins with an idea o buying back those bitcoins at a much lower price.But unfortunately,bitcoin price starts increasing and they lose the game.This situation was even experienced a few months before by bitcoin traders due to wrong prediction.
I suggest that weekend or couch traders should stay away from shorting altogether. Naked shorts are a short road to disaster even for professional and highly experienced traders. Personally, I use shorts only if I properly hedge them, so in the worst case scenario my losses would be minimal if any. If you are tempted to short a coin, remember first that your profit side is limited while your losses are limited only by the size of your deposit. |
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An active day trader myself (sort of), I often think about common mistakes people make in trading. And it seems that I have traced back most if not all such mistakes to their root cause. In a nutshell, it all comes down to being unable to back out if something goes wrong. For example, you buy a few bitcoins at a December high and expect the price to continue rising, which is kind of obvious. Instead, the price starts crashing down and you find yourself in a situation that you didn't envisage or consider beforehand. So your best option would be to bring things back where they were as fast as possible even if it means some loss.
It is not so much about placing dumb stop-loss orders or other trading techniques aimed at minimizing losses as about your mental disposition or general attitude to immediately get out of what can be loosely called a decision limbo when you basically don't know what to do. In other words, search for the exit where the entrance is and do that fast.
most mistakes made by a trading player is that the player can not control his emotions and control his patience because his key trading is to have a very high patience if you do not have very high patience is certainly likely to get a loss. The biggest mistake that people make (I do not mean here only traders) is that they are all in a hurry. We need to learn how to be patient and wait until the right moment comes. Lol, patience also has some level of degree. Patience when a market is just showing some slight movement and you know it is still in the present trend or patience when the market is showing a change of trend and you are still in your present position. Anyone who wants to be a long term holder, there is no harm in that, it is good, but putting too much patience into trading without the use of your analysis unless you are the type that is just buying at any bottom and expecting a huge rise to sell, then you may have the patience, but be careful the bottom you are buying as it may still be a top. Agree with this point. People generally seem to overestimate the importance of patience (being patient). It is not patience (or lack thereof) that they should actually care about. They should rather think about what makes them impatient in the first place. And this is a gaping lack of knowledge and understanding. Really, if you knew for certain that the price would rise tomorrow or in a week or so, would you be so impatient about it today? The lesson to take home is that if you feel impatient and restless for some obscure reason, it is most certainly that you are missing some important detail in the whole picture. |
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An active day trader myself (sort of), I often think about common mistakes people make in trading. And it seems that I have traced back most if not all such mistakes to their root cause. In a nutshell, it all comes down to being unable to back out if something goes wrong. For example, you buy a few bitcoins at a December high and expect the price to continue rising, which is kind of obvious. Instead, the price starts crashing down and you find yourself in a situation that you didn't envisage or consider beforehand. So your best option would be to bring things back where they were as fast as possible even if it means some loss.
It is not so much about placing dumb stop-loss orders or other trading techniques aimed at minimizing losses as about your mental disposition or general attitude to immediately get out of what can be loosely called a decision limbo when you basically don't know what to do. In other words, search for the exit where the entrance is and do that fast.
I agree. The rules of the game is simple, if the price is at its peak, don't even think of buying it. In my case, I always buy a coin when its at least 50% below of its price below (it depends, not usually the case). I found 3 coins who has then I sold it after 3 months. I gained some and I never regret my decision because I hold it long enough and I needed the money. The price went down on the 4th month but it recovered plus 10% on the 5th month. Always trust your instinct but be close to reality. You know what it is. Actually, I like your trading strategy as long as you keep decent coins in your investment portfolio. As history has shown, expecting a ~50% major price retreat is not unfounded since such fallbacks are quite common these days and they can be used as a staple of a long-term trading strategy. As long as the cryptoverse expands, any correction will sooner or later be followed by a major bull rally, so it is kind of sure bet. But be warned, crypto won't expand infinitely. |
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Just to start off, I believe that all trading... Even the mpst basic concept of trade and commerce, are exposed to some element of luck. Bitcoin's extreme volatility has made day trading an incredibly viable method of profit taking but also increases this exposure to luck.
That said, I think the most successful traders with the most consistent performances understand this element of luck and use their experience and skill to minimise reliance on luck, otherwise known as external factors beyond their control.
Technical analysis hasn't convinced me as a reliable trading tool for Bitcoin, it certainly has much less reliability in day trading, but the moderate success of bot and algorithm models used by day tradera suggests that there is enough data and short patterns in the volatility, though likely specific to platform and location.
Arbitrage is one example that thrives in day trading. If not only exclusive to it.
I would say exposure to luck and exposure to a lot of risk. I have tried day trading before and even with stoch or RSI to play with the 80-20 rule with overbought and oversold in a specific time frame of choice, it just does not work sometimes, and most times you just have to be able to learn to play your cards right with a lot of stop loss in the process. I know a lot of people have been doing this and working out for them, but it is just a lot of stress to take in and I would rather stick to the short term or long. Before using an indicator, you are advised to back test it on historical trading data. I know that past growth doesn't in the least guarantee future performance, but there is even less chance that some indicator would ever work in the future if it didn't in the past. I certainly give the benefit of doubt to TA enthusiasts here but when I tested a few TA strategies on historical data myself, none was close enough to being truly successful apart from pure coincidence like the broken clock being right twice a day. |
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Thanks for meriting me. Here's another post which may be worth meriting: Trading is gambling after allWell, sort of, at least for the majority of ordinary and wannabe traders. It is relatively easy to earn money on a rising market but it becomes a completely different matter when a sideways market sets in like it is now in the cryptoverse. There are two major factors that turn trading into gambling for most players in this type of market which are presented below.
First, in any financial or speculative market, where Bitcoin rightfully belongs to, you can earn only if you take money from someone else. It could appear as if everyone earns with the rising price but things reveal their true nature when the price stops rising. It is kind of obvious but accepting this is necessary to understand why you can be the one losing the game in the end.
Second, some market participants have an unrestricted edge over the rest of the pack which means that under no circumstances they will be losing. These are arbitrageurs, insiders, exchanges and their likes. For example, it is impossible to beat exchange since it is 100% sure money for them when they can front run your orders and do a lot of other nasty things which you can't.
Given these two circumstances, it is easy to see that if you do not belong to the group of market participants mentioned above, trading pretty quickly turns into gambling for you. So your only chance to win is pure luck. But luck is not a friend of consistency, therefore the only consistency you can reliably expect is losing to someone who has an undisputed edge over you and the market.
Feel free to comment and post your thoughts and ideas here.
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When 8 out of 10 trades make you a profit, this isn't gambling.
That's having skills and the ability to make money on a constant basis.
Everyone can learn that. All you need is time, discipline and the will to do it!
Even with a small account and no insider informations you can make a decent profit with trading.
Even if it's just small wins. Over the time, this consistency is what makes your account grow and making it bigger and bigger.
Playing the lottery is gambling. Betting on horse races is gambling.
Trading is no gambling if you acquired a decent skill set for various market situations. You don't even have to read books.
It's all for free on the internet. You can do paper trading and practice by using tradingview for instance.
But you need to have patience and practice regularly. The more passionate you are about it, the faster you will improve.
I emphatically agree that no book however good will help you unless you already have some psychological traits or characteristics required for successful trading. But I can't agree that paper trading is of great help here either. Ultimately, the success or failure in trading is determined by how fast and how good you react under heavy stress. Besides, making 8 profitable trades out of 10 doesn't mean a shit. For example, you can make plenty of small wins and then one big crash sweeps away all your profit. In fact, it doesn't matter how often you lose, all that counts is your final balance at the end of the day. You can make just one trade and with that cover a hundred of losing trades made before. |
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Money is one of the important concepts, This section talks about money from the perspective of microeconomics.when people exchange goods and services without using money, this is called barter. "I'll cook dinner if you'll do the dishes" is an example of barter. Imagine an economy in wich i can sell services as a consultant to banks, but what i want is to buy a new suit. the clothing store that sell suits does not have any use for my services as a banking consultant. i sell consulting services for money, and i buy a suit using money. money serves as a medium of exchange. the bank does not sell suits. how can barter work?
A barter system can work under those circumstances without money being involved. An agreement could be made for the bank to barter away the cost of 1 suit for consulting services rendered. For example a bank could barter 10 chickens for the cost of your suit as part of your salary. Under a barter system, goods which can be traded, take the place of currency. Sorry to intervene here but I have to say that you are still implicitly using the concept of money in this scheme. It doesn't exist as a stand-alone currency having a denomination (think non-cash dollars here), but what is the concept of money in the first place? Essentially, money is a system of account, though it doesn't necessarily need to be abstract and unitless as in fiat. But as soon as you build relationships between the values of some goods against other goods and keep these relationships for future settlements, as in your example with chickens and suits, you are already making use of money conceptually. It is clumsy and not very convenient overall but it is still a system of account anyway, while barter is just a plain exchange of goods with no accounting done. |
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Any income generation is associated with excitement. I disagree that trading on the stock exchange is like gambling. When you play casino you depend on luck 100%. When you trade on the stock exchange depends on luck by only 50%. The remaining 50% is your knowledge and ability to analyze the situation.
Some people, if not to say most people, rely on luck alone in their trading patterns, so it is not very different from gambling for them. They just place an order or two here and there, and blindly hope, often in vain, that the price will rise. On the other hand, if you simply follow the trend, you are not gambling already. Because statistically, the trend, once it establishes itself, has more chances to continue than to reverse. This doesn't mean that it will continue indefinitely, of course. This is about chances. Further, if you use arbitrage, your chances of earning are pretty close to 100%. The point is there is no point in such sweeping and hasty generalizations. This definition is not a negotiable one, it is the indisputable dictionary definition.
Dictionaries do not provide definitions (textbooks do), they give explanations. |
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In human endavour every things is gambling. Trading is an advance gambling and we have to let newbie know that trading is a gambling and you cannot continue making money without loses and the odd is always against you because you can not predict the market 100% perfectly. Don't trade without understanding how the market behave and of a truth cannot make money in forex, stock, commodities and cryptocurrencies without understanding the risk associating with it.
I see what you are trying to say here, that is every human activity has an element of chance or gambling attached to it but this is not the point. Trading is gambling for most traders but it is not like true gambling as in dice or roulette. In a casino all players are gamblers no matter what, while in trading only some part, however large, is gambling. And there are plenty of intermediate stages between thoughtless and reckless trading at one end and things like arbitrage at the other. |
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You should always have a supply of Fiat. If you really missed a moment to sell your coins then it is better to stop selling coins and pause. Most cryptocurrencies recover after a fall. This allows a failed trader to recover lost capital and think about changing his profession. But from errors nobody is insured. If you react to market behavior in time, you can quickly recover losses.
Bitcoin had been quite forgiving in this regard until recently. But if you bought a few bitcoins at $20k in December and the price will never get there again in the future, you are pretty much screwed. Besides, I can't agree that most cryptocurrencies actually recover over time. The vast majority of these coins are clear-cut pump&dump scams, and not running from them in due time means losing money (still better would be staying away from them). So it is not about recovering losses like averaging down, waiting out, or anything to that tune. |
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The biggest mistake that day traders make (especially crypto day traders) is believing that they have an edge over everyone else because of the charts they look at. The biggest mistake is not believing that day trading is 100% gambling, because that is exactly what it is. The only way to consistently make money over the long term is to invest based on value and fundamentals.
Only if they could end up knowing that it pays to either do short or long positions in the market than spending the whole hour in front of a chart trying to day trade. I agree with you that day trading is 100% gambling but it is worth the risk anyway and they have a place in the market, I have been there but even though all you use is RSI or stoch to buy into an oversold market, sometimes, you may just end up missing the other indicators to know when a market is turning long term bearish, which obviously brings the stop loss into play anyway. As an aside, I always find it amusing that in TA you can always look for an indicator or two which would have predicted the recent price move close to perfect. The problem is you would know that only in hindsight. Simply put, TA works at all times, it is just a matter of finding the right indicator or method, though there is no guarantee that it will work next time. Apart from very simple techniques like spotting a trend, for which you don't even need TA in the first place, it is mostly complete mumbo-jumbo to me. Sorry if I hurt your feelings here TA guys. |
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I have experienced shady exchange practices first hand back in the early days. In my cases it was on Mintpal and Cryptsy. The issues were Bitcoin deposits not posting during a massive crash of a certain altcoin, where the deposits posted exactly at the moment the market was bought up again. Disabling deposits and withdrawals of coins with massive spreads accross various exchanges, where everything was enabled again once the spread was gone. Orderbook manipulation where the orderbook adjusted itself based on how I was modifying a buy or sell order before I even executed the order. Altcoins that suddenly got dumped down massively, where a few minutes later the exchanges announced that they will be delisted -- this is something Poloniex has done last year as well. Overall, great analysis!
This has even happened recently and honestly that sucks, knowing that a lot of these exchanges are mostly the ones playing with the market to prevent somethings from happening. The Altcoins getting dumped and then you getting the news of delisting is even more common on bittrex and that has made me as a whole concentrate more on coins that are at least better. One thing with trading is that with knowledge, you can make some predictions based on where the market may be leading and this is where swings come in, and as long as you are not controlling the market, just stick to your own knowledge. They are trying to earn money, and being one of the largest crypto holders out there makes price manipulation very tempting as well as profitable to them. But as it was already said numerous times, they can only make money by emptying the pockets of low-profile traders. It is still Wild West where fortunes are made and lost in a glimpse. I often think that there are only two main methods of trading that are actually available to us, though they are not even trading as such. The first is just holding your coins and staying away from price manipulation, and the second is arbitrage. Pick up anything in between, and you will end run over by ruthless price manipulators. |
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There seems to be a lot of confusion, misconception and misunderstanding about day trading and its advantages as well as disadvantages. Some people even say that it is a form of gambling. In this topic I want to explain why it is not and also address the most common issues which day traders encounter and how they handle them. Thank you for your attention.
First of all, day trading is no more gambling than any other trading. If the price rises you ride the wave, if it doesn't you wait until it does. That's pretty much all. In this sense, if day trading is gambling, then all trading is essentially gambling. Besides, arbitrage is also day trading which involves quite a few trades (actually, twice as many) albeit it is anything but gambling.
Further, there is a question of limited profitability. This question has some substance but it seems that people who raise it don't fully understand what day trading comes down to. Many erroneously think that it is mostly about missing good profit opportunities. In fact, nothing can be farther from truth than that. Day trading if done right is actually about maximizing your profits, not losing them.
Statistically, your best trading strategy would be capitalizing on both short-term volatility and long-term growth. Since most price moves happen in a rather narrow range followed by relatively rare but big price changes, an optimal strategy would be dividing your trading capital into parts, smaller parts for catching short-term volatility, while bigger parts for capitalizing on longer-term growth.
You are correct in what you write, but the reasons those misconceptions exist at all has to do with the irresponsibility of many of those that day trade, day trading can be extremely profitable but there are those that engage in the activity despite their limited knowledge and as you may expect their results are very poor this leads them to conclude that day trading is like gambling even if that is not the case. True, but the same can be said with regard to long-term holding as well. Ironically, people who first thoughtlessly engage in day trading quickly turn into holders and investors, sort of, when the price goes strongly against them and they don't quickly close their position. They are hunting for small profits completely oblivious to the risk they expose themselves to. They may earn here and there, and then short but powerful price move eats all their "hard-earned" profits leaving them eternally in red. This is why most people should likely stay away from day trading altogether. |
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and I rather think that gambling can be more promising if we need profit quickly, and of course it can not be separated from. strategy and emotional control.
I beats me why some people still believe that gambling can be more "promising". In trading you can at least hope to evaluate fundamentals and expect the prices to rise or fall in the near future unless these fundamentals have already been priced in. But in casino gambling, such as dice, your only chance at winning is pure luck, except when you can change the odds in your favor somehow. The longer you play the less importance and effect luck will have because it will be largely overridden by house edge. It is not particularly different in trading either, given that the market has its own "house edge" over a typical trader, but at least milking the market as via arbitrage is not considered illegal here. There are a lot of gamblers who 'play' the crypto market. For a guy who is investing in the 1000th ranked cryptocurrency, do you really think he is trying to evaluate fundamentals and take an informed view? He is just making a punt on the coin. Trading can be treated as a game, and crypto trading is a high-adrenaline game. I don't get your point frankly, don't get what you are trying to say or challenge here. In essence, I'm saying that in trading you can at least take steps to making more reasonable "bets" on future price moves which could bear some fruit in terms of profit. This is not possible in gambles such as dice, coin tossing, etc. But that doesn't of course deny the fact that there are quite a few people who are gambling while trading in every possible sense of the word. Other than that, the whole topic is about just that, that is trading as gambling, a high-adrenaline game. |
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I so much agree with you on this. I have made that mistake sometimes back and I ended up learning from it anyway which has really made things to work out pretty well for me over time and make good decisions. Normally, every trader should always know what to even look out for in a trade, either they are following trend, using indicators to see what is going on with some TA and FAs to make their decisions. It was obvious for any trader to see that bitcoin was tapping down and everything showed a bear market, but of course, some are just in the game without knowledge or strategy which is what makes the difference.
You're welcome, bro! Only if they could end up knowing that it pays to either do short or long positions in the market than spending the whole hour in front of a chart trying to day trade.
I agree with you that day trading is 100% gambling but it is worth the risk anyway and they have a place in the market, I have been there but even though all you use is RSI or stoch to buy into an oversold market, sometimes, you may just end up missing the other indicators to know when a market is turning long term bearish, which obviously brings the stop loss into play anyway.
No trader can do without it, and the essence is to buy back in a better position for a better gain than waiting for the market to recover in one position while missing good opportunities.
Stop-losses shouldn't be made into a fetish of sorts. Thoughtlessly placing them just because so was written in a book on trading is not very far from equally thoughtlessly not placing them. As I have explained before, exchanges see these orders and use artificial flash crashes to trigger them. To put it differently, you should be as savvy about placing your stop-loss orders as about not placing them at all. If you stick to TA, they are a must-have normally, but if you follow fundamentals, they are pretty much meaningless. If fundamentals change, you just exit your position immediately and get done with that, so no stop-loss is hurt in the process. |
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yes definitely true, trading is like a gamble..you use money as capital... you gamble it whether it will be successful or not..it is a nature in trading but it is good to try because it adds knowledge on how and what to trade
No it's not, crypto trading needs a lot of learnings and abilities while gambling are not. Because when it comes to crypto trading, you can be a successful one if you have all the abilities of a good trader. But in gambling, even though that you're a professional gambler or what ever profession you have, you don't know actually what will happen to your capital, because gambling always depend on the luck of the player. Well, I'm afraid that it is not that simple. Having all the abilities of a good trader is definitely not enough. Imagine that all traders trading at the moment are your exact clones with absolutely the same abilities. So who takes money from whom will depend on entirely random factors. But isn't it what makes up luck? So it is not enough to have those abilities, your abilities should be way above an average level if you want to get consistent profits. And since there is a group of the invulnerables against which you have no chance, your chance of not going against them is also mostly luck based or random. |
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