Gambling vs. "leveraged" trading

[just_Alice]

Recently I tried leveraged trading for the first time at Bitmex, and ended up in a loss. It seemed similar to a gamble, where you deposit, place a bet and either win (and double) or lose everything. In leveraged trading, if you deposit & place an order and it reaches your liquidation level, you lose everything.

Gambling can't be compared to regular trading, as in regular trading, you don't win much and don't lose much either. However, if you're trading with leverage, then that trading can be considered something similar to a gamble.

I agree that leveraged trading is almost as risky as gambling, it's just the possible profit that attracts people, but even a professional trader, as for me, can't make a 100% prediction. Sometimes one can say with a 70-80% probability that a certain cryptocurrency will increase, or decrease and whether it is better to sell now, or to buy. But guessing the exact price in a certain period of time - that's too risky and only the one who personally manipulates the price can know what will happen. I think leveraged trading should be done only with small amounts of money, due to the likely possibility of losing it all, unlike in a regular trading, where there are chances to recover your losses someday.

[atorle]

They really look same to me since losses are 100 percent when you miss on your 'bet', and the upside it that you get rewarded far beyond the normal trade. imagine a 100x leverage position

[witephereos]

When many people here are comparing trading with gambling, the margin trading must be a pure trading version of gambling. You cannot hold your positions if you have opted for higher leverages. You will get greedy when you will be set with more capital to trade compared to what you actually have.

I guess we had big topic here about gambling with borrowed money. I guess that has no big differences from leveraged trading.

[wuvdoll]

Once you put in your money into something and you will earn in return from it. I think it slready called gambling since you do not have the assurance the return of youre money plus the profit unless you are too lucky but most of the time youll ended busted. In my opinion both can be considered as gambling.

Well, that is one way to put it but in another way, you really cannot compare gambling fully with trading but you can compare yourself trading to you gambling based on how you actually perceive trading. If you are trading with no strategy and all you do is gamble the possibility of where the position may fall to, then you are actually gambling, and in most cases some people with no knowledge even end up using a high leverage. Trading can be done with knowledge and that is what makes it entirely different from gambling.

I guess we had big topic here about gambling with borrowed money. I guess that has no big differences from leveraged trading.

Thank you for reminding us. The common thing among trader and gambler is, they always prefer to learn their lessons only from their own experience. Sadly, no discussion here may not helpful to both of them, .

[KonstantinosM]

I've never participated in leveraged trading. The end result is the same but it's not gambling in the same way that correlation does not equal causation.


In truth, if you're on some hot news that will shake up the price and you have a good understanding of the market, you could have the odds in your favor. For example, if you kept going long, you could have made a lot of money over time.


With gambling you'd just continually lose money day after day.

[darkangel11]

I've never participated in leveraged trading. The end result is the same but it's not gambling in the same way that correlation does not equal causation.


In truth, if you're on some hot news that will shake up the price and you have a good understanding of the market, you could have the odds in your favor. For example, if you kept going long, you could have made a lot of money over time.


With gambling you'd just continually lose money day after day.

You're mixing market manipulation (insider trading) with normal trading. If you are onto some rare news that only a few people know about you are an insider. Just like you would be if someone from the SEC were to tell you that they are planning to allow CBOE ETF next month and you went on and invested everything. It's against the law.
If you trade like a normal person you can never know what's going to happen. For instance when Winklevoss ETF got rejected the price went down, but today a number of ETFs met the same fate and the price didn't budge. Trading is just a more fancy type of gambling.

[Symphonized]

First You need to know what your dealing with, isn't just a gamble. But a market trading economy that can shift up and down randomly.
Consider you have the knowledge about some crypto and that has a high 24h volume on exchanges.
Also if it has alot of activities (tradings). Else its a dead coin.
There are some guides from Doug Polk, you should check them out.

[Sukut]

It has similarities as you don't have full control over leveraged trading either. But leveraged trading is not based on pure luck like most of the gambling games. I don't think it could be considered as gambling.

[ethereumhunter]

It has similarities as you don't have full control over leveraged trading either. But leveraged trading is not based on pure luck like most of the gambling games. I don't think it could be considered as gambling.

leveraged trading using analysis to determine the trends and we need to know where the price wants to go in the next hours or tomorrow. and in leveraged trading, we can have a chance to get profit and even for big profit especially, if we can make a good analysis. but in gambling, our chance is not too big and we still depend on the luck factor and we have a chance to lose the money.

[pixie85]

It has similarities as you don't have full control over leveraged trading either. But leveraged trading is not based on pure luck like most of the gambling games. I don't think it could be considered as gambling.

So when do you start calling something gambling? When you have 10% control? 5%? 1%? If you analysed gambling you'd know that some games are 100% luck but some are only 50% or even less. Are some of them gambling while others are not?
In my opinion if there is some amount of luck involved it's gambling.

[josephdd1]

In my eyes, gambling stands as a much harsher way to lose money because the risk is much bigger whilst at least in 'leveraged' trading one can rely on many indicators such as news and technical trend analysis.

[dead_m92]

Both things are more than different and you can not be comparing them, trading is good, and you can make profit if you study it.

Gambling is more than different, you can not make profit if you just study it, because it works because of an algorithm, that is based on the platform.

In my eyes, gambling stands as a much harsher way to lose money because the risk is much bigger whilst at least in 'leveraged' trading one can rely on many indicators such as news and technical trend analysis.

[haroldtee]

Both things are more than different and you can not be comparing them, trading is good, and you can make profit if you study it.

Gambling is more than different, you can not make profit if you just study it, because it works because of an algorithm, that is based on the platform.

In my eyes, gambling stands as a much harsher way to lose money because the risk is much bigger whilst at least in 'leveraged' trading one can rely on many indicators such as news and technical trend analysis.

Approach margin trading like you are gambling, and you will realize they are not so different. Margin or trading the leverage way is a type of trading where if you do not have a strategy, and a good trading knowledge, you can get liquidated completely, and that is one thing you really do not want to see happen right? But you will see it happen just in the same way as gambling will get you screwed when you see trading as just a game of luck. A lot of people today that approached margin trading with the mindset of gambling, will sure have that story to tell you

[el kaka22]

Both things are more than different and you can not be comparing them, trading is good, and you can make profit if you study it.

Gambling is more than different, you can not make profit if you just study it, because it works because of an algorithm, that is based on the platform.

They actually do have a lot in common depending on how you approach trading and most especially leverage trading.
First and foremost, margin trading is something you can lose everything by getting liquidated, which is the same thing that can happen with gambling.

The only difference here is that when you are trading with knowledge and a good strategy, you sure will have a good chance doing well at it than gambling of course, but the mistake you ever want to make is to approach margin trading like gambling, you would be surprised at the level at which you will get burned the same way gambling originally does.

Still, when buying something in trading without proper analysis then it will lead to disasters whereas in gambling people do start gambling with lots of hours spent on deriving their own strategies still same disasters may happen in a blink of eye. Not just with gambling and trading, in our routine life, if we go in perspective analysis we may find lots of similarities in many conceptually different domains. Hence, no wonder in comparing/differentiating gambling and trading.

[Ipwich]

That is not correct, I do not believe that we cannot make money in gambling, it's possible to win but the chance to win is very small compared to trading or course. You spend time to study a certain type of gambling as long as it's based on skills, I am sure you will win in the long run.

Both things are more than different and you can not be comparing them, trading is good, and you can make profit if you study it.

Gambling is more than different, you can not make profit if you just study it, because it works because of an algorithm, that is based on the platform.

In my eyes, gambling stands as a much harsher way to lose money because the risk is much bigger whilst at least in 'leveraged' trading one can rely on many indicators such as news and technical trend analysis.

[BartS]

Recently I tried leveraged trading for the first time at Bitmex, and ended up in a loss. It seemed similar to a gamble, where you deposit, place a bet and either win (and double) or lose everything. In leveraged trading, if you deposit & place an order and it reaches your liquidation level, you lose everything.

Gambling can't be compared to regular trading, as in regular trading, you don't win much and don't lose much either. However, if you're trading with leverage, then that trading can be considered something similar to a gamble.

Even if they seem similar there is a difference, you can choose whether or not you leverage your trades, that small difference is enough to tell you that gambling and leverage trading are not the same, however once you use leverage trading I will admit that both activities become very similar, this is why it is recommended that only those that are expert traders use leverage at all but like always people do not listen because they only see the potential profits they can get.

[dogandogru]

I don’t think that “leveraged trading” is similar to gambling. No matter what type of trading it is, your decisions should always depend upon the knowledge about the market, implying that you need to understand and research the market carefully. Even for deciding the price of the coin in leveraged trading, you should really have some market knowledge but in gambling it entirely based on random guess and the result is based on your luck.

[coolcoinz]

I don’t think that “leveraged trading” is similar to gambling. No matter what type of trading it is, your decisions should always depend upon the knowledge about the market, implying that you need to understand and research the market carefully. Even for deciding the price of the coin in leveraged trading, you should really have some market knowledge but in gambling it entirely based on random guess and the result is based on your luck.

Sure it is, especially in a volatile market like Bitcoin. While with normal trading you can as they say hold a bag for a while, it's impossible with leveraged trading.

To make it simple, normal trading involves technicals and fundamentals. If you buy in and the technicals fail you, you are still left with the fundamentals. That gives you the ability to freeze funds for a while, while being 5 or 10% at a loss, and wait for a bounce. This isn't possible in leveraged trading as you have to pay to hold your position and can eventually run out of money or come to the point when your eventual gains would barely cover the exchange fees. That's why it's a quick way to a large profit... or ruin.

[maydna]

I don’t think that “leveraged trading” is similar to gambling. No matter what type of trading it is, your decisions should always depend upon the knowledge about the market, implying that you need to understand and research the market carefully. Even for deciding the price of the coin in leveraged trading, you should really have some market knowledge but in gambling it entirely based on random guess and the result is based on your luck.

Yes, you are right. In leveraged trading, we should know how much profit we should take and don't greedy because this will makes you become a loss. I prefer with leveraged trading too although we don't have much knowledge about the coins as long as we can see the green colour in the status of the trading then it means, we can take the profit. I think it's easy to try in leveraged trading and the profit will be good for us.

[Barbut]

I don’t think that “leveraged trading” is similar to gambling. No matter what type of trading it is, your decisions should always depend upon the knowledge about the market, implying that you need to understand and research the market carefully. Even for deciding the price of the coin in leveraged trading, you should really have some market knowledge but in gambling it entirely based on random guess and the result is based on your luck.

Yes, you are right. In leveraged trading, we should know how much profit we should take and don't greedy because this will makes you become a loss. I prefer with leveraged trading too although we don't have much knowledge about the coins as long as we can see the green colour in the status of the trading then it means, we can take the profit. I think it's easy to try in leveraged trading and the profit will be good for us.

In any kind of trading and gambling greediness can be a killer of your stash. Both are risky, both can be tricky as hell, and both can take your money away or earn you a lot of money. I will go with gambling, much easier, much less bothering, leverage trading require special skills, you need to be active a lot, you need to have accounts everywhere, basically you earn of fluctuations in exchange rates between two different countries, now you figure it out how to do it, with gambling you have much more fun and its much easier.