Can trading be likened to gambling and how so?

[Lida93]

Not  really sure where to drop this thread since it's a compendium of gambling and trading as it seeks to make clearer a blur end.
Which is.
Like the game of chance gambling. Can trading in anyway be likened to gambling and how so?

But before you delve in for contributions, let me throw some light below for a better understanding of the idea behind the thread.

Example:
For when we want to gamble, let say in sport football specifically, we look at certain criteria that aid us to a good bet, such as:
1> Head to Head
2> current form of the club and position on the table.
3> The strength of the opponent, etc.

Likewise in trading before we trade we look as certain measures such as:
1> Market trend and direction
2> The price level, market news and some other criteria too.

Now we all know that before going into trading or gambling its advisable to be emotionally stable and to involve a certain sum you're willing to risk etc, all these are similarities shared both in gambling and trading too.

With  these few above I think a clear discussion can well surface to clear the air about a likelihood or not.

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[blockman]

Those examples are really understandable analogies to why many understand and think that gambling is close to trading but they're entirely different. Both gambler and trader do take risks for each trade and bet that they take. The key takeaway from this article from Investopedia is a really good comparison of gambling and trading.
(https://www.investopedia.com/articles/basics/10/investing-or-gambling.asp)

[NeuroticFish]

Sports betting is not seen by everybody like gambling. Sports betting means an educated guess. Gambling is driven by chance.

And something like this happens with trading too. For some, trading is an educated guess based on TA, news and other stuff. For others it's only based on "gut feeling" (i.e. chance).


So it depends on what you mean by gambling and it depends on which traders you are asking about; I expect those that treat trading like gambling not survive for many years in the business.

[Oshosondy]

In gambling, no matter how good you are, underdog can win a strong team, which means there are chances that the bet may go wrong way and result to lose.

Gambling is all or none, if you lose, you lose all. Please never quote to post about cashout, I have used it several times without any useful help. In trading, the market may first not favour but later favour, you may be losing before and later profit may come.

Nobody can be professional in gambling, we should not deceive ourselves. There are professionals in trading, if indicators and market are well studied and also using low leverage, trading is better.

I opned a 1x short position day before yesterday when bitcoin price was $21000, bitcoin got to $22000 and I increased the leverage to 2x, the mark price increase from $21000 to around $21500. I was losing before but the market corrected to the position I opened and I gained. I couldn't see that in gambling.

Both are very risky, but for professionals that are both gamblers and traders, they will choose trading.

[mk4]

Trading (can be the same with investing) being gambling or not will completely depend on the person if he/she is actually making informed decisions or are just going at it haphazardly. Trading is obviously far closer to gambling though, due to short-term movements being A LOT more unpredictable.

[Nrcewker]

Gambling is something when you put your money to get extra money in return.
Trading can be termed as similar but yes with little changes.
In trading the risk involved is minimal, and in gambling the risk is very high comparing to gambling.
In these ways it can be linked, but yes both are different, and people look into both with different perspective.

[Silberman]

Sports betting is not seen by everybody like gambling. Sports betting means an educated guess. Gambling is driven by chance.

And something like this happens with trading too. For some, trading is an educated guess based on TA, news and other stuff. For others it's only based on "gut feeling" (i.e. chance).


So it depends on what you mean by gambling and it depends on which traders you are asking about; I expect those that treat trading like gambling not survive for many years in the business.

I think the same, I can understand why the OP may ask such questions as he is comparing trading with the gambling game that is the most similar to trading and which uses a great deal of the same concepts, however if we compared trading with dice then we could very clearly see the differences between the two, when it comes to trading we use a set of data to make the best educated guess that we can about the direction the market will take, while something like this is impossible in the game of dice or any gambling game in which randomness reigns supreme.

[Adbitco]

Both are not the same sometimes gambling make it worse if you bet or gamble you stand a chance to either win or lose and that is final your funds can not be recovered on like the trading, in sport trading, you can trade and make some profits or currencies in which you are trading with might lost value (depreciate) and you still have some left behind and can be liken to increase at any given time. You can trade and make instant profit but Gambling is more or less of a "Probability game" which is termed to be 1 or 0, 0 or 1. Either you lose or you win, so they quite different btw.

[Lida93]

Sports betting is not seen by everybody like gambling. Sports betting means an educated guess. Gambling is driven by chance.

Are you trying to imply that  sport betting and the chances to win is borne out of a persons level of education? And also if sport betting is not regarded as gambling by some persons as you said, then why the inclusion in gambling sites.
Can you enlighten me about this.

[Oshosondy]

Sports betting is not seen by everybody like gambling. Sports betting means an educated guess. Gambling is driven by chance.

To bet means to gamble. I am just hearing about this, what I know sport punters do say and that I do say is that it require analyses which makes it different from other type of gambling, but sport betting is beyond educated guesses, it is also driven by chances. People that gamble often can expatriate more on this. The sport gambling sites make odds in a way it will be hard for anyone that bet often to have a positive net profit, that is why the industry is growing, they are making the money from punters.

Both are not the same sometimes gambling make it worse if you bet or gamble you stand a chance to either win or lose and that is final your funds can not be recovered on like the trading, in sport trading, you can trade and make some profits or currencies in which you are trading with might lost value (depreciate) and you still have some left behind and can be liken to increase at any given time. You can trade and make instant profit but Gambling is more or less of a "Probability game" which is termed to be 1 or 0, 0 or 1. Either you lose or you win, so they quite different btw.

You are very correct, gambling make it worse, but that is for professionals, for newbies, both gambling and trading are like the same if talking about losses, only experienced traders knows the right thing to do to make profitable trades.

Are you trying to imply that  sport betting and the chances to win is borne out of a persons level of education? And also if sport betting is not regarded as gambling by some persons as you said, then why the inclusion in gambling sites.
Can you enlighten me about this.

In theory, it can be like that, but in real life, it is not. The most dominant type of gambling in my country is football, after checking prediction sites and after making your own analyses, if you gamble more, you will notice losses. There is no perfect thing than to take gambling as fun and never use the amount of money you can not afford to lose to gamble. But the fact remain that professional traders still use more money to trade, especially if they earn profit often, but they will always also still advice people to use the amount of money they can afford to lose to trade because they know it is also risky, especially for beginners, beginner traders always lose and they do not know how to manage risks.

[xSkylarx]

-snip

Your topic surrounds only to sports betting where a game's outcome doesn't rely purely on luck compared to other gambling games such as slots, cards, etc. that you can find on a casino or website. On those type of gambling, whatever strategy or analyzation you do, you need luck to win. Trading and sports betting are similar in a way that there are factors or medium that helps you to avoid the risk of losing your money.

[NeuroticFish]

Are you trying to imply that  sport betting and the chances to win is borne out of a persons level of education? And also if sport betting is not regarded as gambling by some persons as you said, then why the inclusion in gambling sites.
Can you enlighten me about this.

Let's say there's a football match between Liverpool FC and Huddersfield Town (taken from this list)
If you would do betting (like in high/low, or maybe roulette) you would maybe bet on Huddersfield Town. But since you do an educated guess and know a bit about football, you'll bet on Liverpool and will probably win. (PS. Educated guess is related to how much you know about that topic, not about general education.)
Of course, there's a risk factor there too, but not that big.
This is what I was saying.

Why included in gambling sites? Because they love to diversify. On the other hand... did you see sports betting in a Vegas casino?

[Flexystar]

Though words can be used synonymously all the time I feel like gambling and betting sections shall be kept different. I know the fact that sportsbook is also now available on all the gambling sites but its entirely different way to make up the money. You bet on the strong team, you have only one outcome such as either team A will win or team B will win.

On the larger picture, trading is whole new way of investing your money. You don’t gamble there, you trade it based on the database. For example, companies performance, its assets, its roadmap and there is so much more to consider in that. For me both are different.

[palle11]

Trading still stands as more critical and more research driven than gambling. The only gambling game that can be said to have research is soccer and real physical games like basket and field games. Games in casino and fictional games are not based on research.

Trading also has professionals that can predict with chart and indicators and whether it takes longer time or not it obeys into the technical analysis. Trading is not a game and not based on chance. If you are trading and losing and with what you see in your chart as you monitor the price action, spikes and candles, the price can revert your losing trade into profit.

[ChrisPop]

Trading can be compared to gambling in the sense that in both of them you basically make 'bets' on the outcome of a certain event at a certain time.
But there is a big difference between the two --> in gambling you are doomed to lose while you can make a good living out of trading, but it takes tremendous amount of work and dedication.

Another important distinction is that in gambling you always know how much you're losing on a single game (you can't lose more than what you bet), while in trading you can get your whole account erased if you don't apply sounds risk management principles.

[rhomelmabini]

If it's the definition alone they're certainly far to be likened as one. Gambling more likely dependent on the chance but not all gambling related games aren't the same case, so do it is in trading. Trading feels like as gamble but it's only for those trader that wouldn't take much more seriousness on their trades, same as to those who just want to throw their money for gambling.

[ethereumhunter]

Trading can be likened to trading when you don't analyze the coins you want to buy or sell because you will decide randomly and don't know what's going on in the market. You only follow what other people suggest from forums, chat groups, social media or others so you don't have an analysis of why you decided that way.

If we do not try to analyze the indicators available in the market and guess where the market direction will turn for a while later, it can make us wrong and get lost. So before you decide like that, you need to analyze it first so you don't make the wrong decision.

[Pandu Geddon]

Trading (can be the same with investing) being gambling or not will completely depend on the person if he/she is actually making informed decisions or are just going at it haphazardly. Trading is obviously far closer to gambling though, due to short-term movements being A LOT more unpredictable.

I guess it only applies to futures trading. while those who trade spots I think far from a gamble.
the results of gambling bets we never know the results. the term 50 wins: 50 loses. or maybe a draw. whereas in trading, even though we are at a loss, we consciously can not sell it at a loss. so we won't lose anything. because the assets we have still have the same amount. although its value is reduced.

[mk4]

I guess it only applies to futures trading. while those who trade spots I think far from a gamble.

It's irregardless of the type of trading. People can trade futures in a "smart" manner.

the results of gambling bets we never know the results. the term 50 wins: 50 loses. or maybe a draw. whereas in trading, even though we are at a loss, we consciously can not sell it at a loss. so we won't lose anything. because the assets we have still have the same amount. although its value is reduced.

Taking a loss with a trade to prevent further potential losses can be a smart thing to do and is a thing that's commonly used. It's called using a stop-loss, which is a great exchange feature.

[0verseer]

Trading (can be the same with investing) being gambling or not will completely depend on the person if he/she is actually making informed decisions or are just going at it haphazardly. Trading is obviously far closer to gambling though, due to short-term movements being A LOT more unpredictable.

I guess it only applies to futures trading. while those who trade spots I think far from a gamble.
the results of gambling bets we never know the results. the term 50 wins: 50 loses. or maybe a draw. whereas in trading, even though we are at a loss, we consciously can not sell it at a loss. so we won't lose anything. because the assets we have still have the same amount. although its value is reduced.

If you are doing spot but know nothing about that, like buy something when it was at ATH or in pumps, you're pretty much taking a gamble tho. Looks at the LUNA case where it drops more than -99% of its value. Even if you buy it when it was around $1, the coin still drops down as low as $0.00001. For gambling bets, there were certain games where you can get your money back without losing or winning too. So it isn't like 50 wins: 50 loses odd, either lose your money or win big. If you're irresponsible with your money and invest randomly without any reason then you're gambling with your money.