Is this a gamble or a trade ? The clear test that works

[Lida93]

Snip

Both gambling and trading have the potential for financial risk. Gambling is completely based on luck and its results are mostly opposite. Many people can make a profit in trading due to decisions made based on experience. However, it is very hard for a trader to sustain profits in the long term. But when a trader relies on luck  it becomes like gambling. If a trader loses repeatedly, he should take a break and can re-enter after increasing his skills.  And making such decisions is risky. While gambling is completely based on luck, trading is not. And those who survive in trading survive because of their skills, knowledge, experience and right decisions.

On a norm we shouldn't be comparing trading and gambling as they're of different category regardless of the financial risk that are involved in both. And you're correct that gambling is lucky based entirely despite issuing some strategy with it. But in a profit sustainability stance I think trading can be more sustainable in profit making than gambling because it's not something of luck but of skills, experience and strategy, your profitability level doesn't depend on chance but on how good you're in trading.

[Smartprofit]

I have a very clear test that works 100% (at least for me) for making sure am I gambling or trading at the moment.

If I gamble and I lose, I will feel terrible. Because I have lost valuable resources for nothing.
If I trade/invest and I lose, I will feel good. Because I know and feel that the lost trade that I have made using all my resources in the best possible way I was able - that this lost trade is a valuable asset from what I and others can learn much. A lost trade is as interesting and useful as a negative result in science (hypothesis that is proved to be false).



(I have not gambled in markets long time because it is relatively easy to be fully aware for avoiding it some minutes or hours I am behind my trading desk. I have gambled occasionally in everyday situations (for example in traffic) when I lose my awareness - is is difficult to be 24/7 fully aware).

I have a slightly different criterion for distinguishing between gambling and trading. If I have a competitive advantage over other players and can articulate it, then it's trading. If I don't have a competitive advantage (or at least can't clearly articulate it), then it's pure gambling. 🙋

As a rule, gambling implies a long-term winning probability of less than 50%. However, if your long-term winning probability exceeds 50% (taking into account platform fees), then, in my opinion, it's no longer gambling, but a real business. 💸

As for your approach to trading, where every new trade is analyzed and evaluated, I think it's a very reasonable approach! That's how feedback systems work. In other words, you create a system for generating consistent profits through trial and error. Consequently, you have every chance of gaining a competitive advantage over other players and starting to consistently make a profit (while other players will suffer losses).

[abaeze]

I think there is not much difference between gambling and trading. Because both trading and gambling are risky but before taking risks in gambling analysis, statistics and mathematics are of no use, it depends entirely on luck but in trading analysis, statistics and mathematics work in many cases and in the long run it transforms you into a mature trader but in the long run gambling is nothing but an addiction which later has a bad effect on the family, society and generation. Moreover trading transforms people into mature and patient investors but gambling pushes people towards destruction in the long run.

[The Cryptovator]

If I gamble and I lose, I will feel terrible. Because I have lost valuable resources for nothing.
If I trade/invest and I lose, I will feel good. Because I know and feel that the lost trade that I have made using all my resources in the best possible way I was able - that this lost trade is a valuable asset from what I and others can learn much. A lost trade is as interesting and useful as a negative result in science (hypothesis that is proved to be false).

Gambling is totally different; there you aren't investing. Rather, you are gambling with your luck; when you lose there, you are losing it permanently. But if you invest in Bitcoin, then it's never going to be lost. Due to market conditions the value of the investment would differ, but if you bought one Bitcoin, it would remain the same forever unless you don't spend it.

I won't accept gambling losses; that's why I don't even do future trading as well. Trading or investing means we are buying something valuable, unless it's shitcoins that won't be zero, especially if you invest in Bitcoin. I have been holding a couple of coins, including Bitcoin, and don't bother to gamble with my own funds. Trading might make you lose for some time, but if you can hold on with patience, then it's possible to recover in the near future.

[BALIK]

I think there is not much difference between gambling and trading. Because both trading and gambling are risky but before taking risks in gambling analysis, statistics and mathematics are of no use, it depends entirely on luck but in trading analysis, statistics and mathematics work in many cases and in the long run it transforms you into a mature trader but in the long run gambling is nothing but an addiction which later has a bad effect on the family, society and generation. Moreover trading transforms people into mature and patient investors but gambling pushes people towards destruction in the long run.

Whether you become more mature and patient, or a successful investor, will depend on your seriousness and effort. It has nothing to do with trading, and it will not help you become more mature or successful.
How can you succeed with trading when in essence, you are just gambling? You trade based on luck, emotion, or you learn nothing from each loss and just hope things will be different next time.

Who we become is decided by ourselves, not by gambling or trading. Many people are gambling and using trading to cover up their behavior.

Trading is also addictive and has ruined the lives of many investors, it is not alway as glamorous as you might think.

[CONVOAI]

You talk about learning from losses but if the learning is not measurable then its true value is greatly diminished. Just feeling I learned or this was a valuable experience is not enough because over time these feelings become vague and you can make the same mistake again. If you clearly write down after each losing trade and what your initial expectation was, what logic or data you based your entry on and where the decision went wrong entry timing, risk management or emotional bias, etc and what specific changes you will make to avoid that mistake in the future then this process will actually become a structured learning system. This way each of your losses will gradually turn into a documented asset that you can review later and track your improvement. Otherwise it will remain just a momentary good feeling that has no long term impact.

[dansus021]

Is this a gamble or a trade ? The clear test that works. The real test is simple if we talk about trading here, if you long or short some token blindly, just click a button I would consider that a gamble whenever you lose or profit. But if you do trade with clear mind, didnt drive by the ego using some technical and fundamental analysis that I would consider a pure trading, even if you lose you gonna see the reason why you lose it or winning it.

So maybe this is the simple way wheter this gamble or trade

[Iranus]

I do not know how effective this test is in determining whether we are gambling or trading. However, I want to say that if you have been trading for a long time and still have not made any profit. You keep losing money time and time again, and you still have not found a strategy to make a profit. It is very likely you are gambling, not trading, and you may even be addicted.

Whether it is trading or gambling does not matter, what matter is your goal when entering the market. If your goal is profit and you have not achieved that, you have failed and need to reconsider.

[tvplus006]

... A lost trade is as interesting and useful as a negative result in science (hypothesis that is proved to be false)...

This is only if, after an unsuccessful deal, you analyze the reasons that led to the loss. But in my opinion, it's better to learn from other people's mistakes than to gain experience by losing your money, because as a rule, every mistake a trader makes has already been analyzed, you just need to keep learning.

[Finestream]

There are no losses that are considered good. Even if you claim that your losses in trading turn as your assets and lead to create good experiences in trading, still losses should not be seen as a positive drive. Losses are always losses, no matter in what ways we are seeing it.

But as what I kept saying, what works for us may not work for anyone else, but if it works for you, then stick to it. The thing is, no one trades for losses but its always for gains and profits, just trade based on what's profitable for you.

[OsaiEmma]

I have a very clear test that works 100% (at least for me) for making sure am I gambling or trading at the moment.

If I gamble and I lose, I will feel terrible. Because I have lost valuable resources for nothing.
If I trade/invest and I lose, I will feel good. Because I know and feel that the lost trade that I have made using all my resources in the best possible way I was able - that this lost trade is a valuable asset from what I and others can learn much. A lost trade is as interesting and useful as a negative result in science (hypothesis that is proved to be false).



(I have not gambled in markets long time because it is relatively easy to be fully aware for avoiding it some minutes or hours I am behind my trading desk. I have gambled occasionally in everyday situations (for example in traffic) when I lose my awareness - is is difficult to be 24/7 fully aware).

I get where you're coming from. You're basically saying, lost trades are like failures you learn from, that's a very good mindset and it is very important in trading. Trading usually involve a lot of emotions, this makes a lot of traders make bad decisions and loose a lot of money, if you can put your emotions in check, you're one step ahead a lot of traders cause there are so many things involved in trading, not just emotions.

This mindset will also make you as a trader stop chasing your losses. The mindset that I have to recover my loss is also very dangerous, so nice one OP.

[Botnake]

Losses are never different either. Whether you lose from gambling or from trading/investing, that fact remain that you are losing a significant amount, something from your hard-earned money. So I don't see any difference with it, you will definitely lose both from gambling or trading if you do them blindly.

Moreover, if you keep losing from trading, that only proves one thing, you are not an effective trader, and you are most likely gambling in your trades. Not until you find yourself putting some real efforts and trade with real knowledge and good risk management, and trading with the right timing, then you are no longer gambling, but seriously trading.

[tvplus006]

If I gamble and I lose, I will feel terrible. Because I have lost valuable resources for nothing...

So maybe you should stop and not gamble? There is a lot of information about trading right now, which in particular describes various trading strategies. Perhaps it's time to educate yourself so that your trades are not opened in the hope of luck, but are meaningful and at the same time risk management is respected.

[Wapfika]

I have a very clear test that works 100% (at least for me) for making sure am I gambling or trading at the moment.

If I gamble and I lose, I will feel terrible. Because I have lost valuable resources for nothing.
If I trade/invest and I lose, I will feel good. Because I know and feel that the lost trade that I have made using all my resources in the best possible way I was able - that this lost trade is a valuable asset from what I and others can learn much. A lost trade is as interesting and useful as a negative result in science (hypothesis that is proved to be false).

The difference is that your trading because you want to gain as this is a financial tool to increase your financial position while gambling is a form of entertainment that gives fun through gambling win or profit.

You are using gambling the wrong way if you feel that you have nothing gain when you lose because entertainment should be its main purpose.

Maybe try to determine and allocate properly your money on both gambling and trading to avoid comparing its effect.

[DanWalker]

There are no losses that are considered good. Even if you claim that your losses in trading turn as your assets and lead to create good experiences in trading, still losses should not be seen as a positive drive. Losses are always losses, no matter in what ways we are seeing it.

But as what I kept saying, what works for us may not work for anyone else, but if it works for you, then stick to it. The thing is, no one trades for losses but its always for gains and profits, just trade based on what's profitable for you.

In business or trading, losses are unavoidable, and we shouldnt be discouraged and give up just because of a few losses. However, its also a mistake to deceive yourself into thinking that losses are a good thing and let it happen repeatedly.

You're right, a loss is a loss, and our money is being lost. Therefore, instead of being stubborn, we need to be realistic and adjust promptly or stop at the right time. Dont wait until things get too bad and beyond repair to realize that.

[Makus]

One major season why a trader can still feel hopeful even after losing but don't feel the same way when losing in gambling is because trading is a developmental process, although this doesn't mean that you should trade without control and lose carelessly. For traders that take out their time to analyze the market and follow the rule of risk management there is a high chance of them making more profits even though they incur losses. This is the reason why most traders still feel like they are still on track after losing a few trades, they simply learn from experience.

[Faisal2202]

At this point, you are acting like a weirdo. You lose in gambling, and you lose in trading, is it not money you lost in both? Technically, I got your school of thought, but in the end, you are still wrong. You might not feel the loss in trading simply because of delusion, since you believe you did the right thing, but in the end, loss is loss, as something went wrong, which made you lose. No loss should be celebrated.

It does feel weird, but he was comparing it with gambling, so it is not that weird. He is right about everything.

A loss is a loss, and he accepts that too. The fact that supports it is that he accepts the end results. He knows when he is gambling and loses, he feels terrible, but when he trades and loses, he knows he must have done something wrong, so he will try to find that out, like most of us. And once he finds it, he will obviously remove that mistake to make his trading experience better next time.

I think the test he wants to share is not that bad, but it might not work for everyone because not every trader is a gambler. Gambling addiction can ruin someone's life. There is a line that no gambler should cross, but that line also exists for traders. If a trader is using all of his resources, like selling things, taking loans, and making his life worse by trading and losing again and again, then that trader needs to stop and definitely feel bad because they are losing money.

[Emitdama]

Losses are never different either. Whether you lose from gambling or from trading/investing, that fact remain that you are losing a significant amount, something from your hard-earned money. So I don't see any difference with it, you will definitely lose both from gambling or trading if you do them blindly.

Moreover, if you keep losing from trading, that only proves one thing, you are not an effective trader, and you are most likely gambling in your trades. Not until you find yourself putting some real efforts and trade with real knowledge and good risk management, and trading with the right timing, then you are no longer gambling, but seriously trading.

While it's true that if you do them both blindly, then you will lose money in both. But at least trading has a possibility of making money, if you are doing a good job learning it, whereas no matter what you do, there is no possible way of making money from gambling, it's a system where you eventually lose, even if you win at first, you will lose, there is no way of making money there.

Trading is tough, we all know that, and there are a lot of people losing money from it, in fact most of the users in big exchanges actually end up losing more than they win. But the reality is that, it is not because trading is not a way of making money right away, we should be considering this as something that you need to learn first, before you make money.

[Awaklara]

This is the reason why most traders still feel like they are still on track after losing a few trades, they simply learn from experience.

Some learn from their trading experiences where they suffered losses, but there are also those who cannot find mistakes in their trading. Trading indeed requires a process; at first, it may seem like someone is gambling in the market. They only use simple analysis or even rely on instinct alone. Not everyone will feel that losses in trading are experiences that can be learned from. Some beginner traders eventually give up because they cannot improve themselves.

[Dzwaafu11]

The clear distinction to me between gambling and trading is that if you place a bet without prior analysis then you are gambling because you are just merely hoping to make profit rather than having made an informed decision. If you truly took your time to understand and analyze the market then you are trading. If you are just guessing, you are better off in a casino.

Trading is all about analyzing, although in gambling I can not many actually analyze rather they place bet base on the team performance that season or their last match, I know people who that is their method of gambling mind you this people lose money everytime.

However, in trading you can’t just enter the market and start trading without any analysis, that trader will possibly lose that money, because he don’t even know how the market movement look like at that moment and want to make money out of it.