This entry has now been placed in a series we are doing regarding the fact that Trading? IS Gambling. And thus this post continues from the previous post in that series …
We run into this issue with many new traders. They wish to argue that with some sort of “analysis” or “technical overlay”, they can predict the future and therefore they are not “Gambling”. After all … they have a “system”.
But what is even more fascinating to us is that even supposed ‘Trading Educators’ try to claim that Trading is not gambling. We have listened to ‘Trading Podcast’ after Financial News Network Interview after ‘Trading Blog’ article; all with supposed experts trying to claim that “Trading isn’t Gambling”.
Yes. It is.
But I am curious as to why do so many argue against this very simple fact? And trust me, it is a fact. We have already discussed the science of this point. And in future articles we will discuss University published literature that backs up our statements. But I digress.
Again, why do so many argue against the fact that trading is gambling? What is driving that opposition? I am genuinely curious.
Do such think that gambling is somehow ‘beneath’ them? Well again, let’s refer to the definition, of Gambling …
Wagering something of value on an unknown, future event with the intent of winning something else of hopefully greater value.
Listen … with that definition in mind? Every one of us are gamblers. Whether we are traders or not, is beside the point.
And we are not being pedantic about our choice of words. Words are important. We are … all of us … gamblers as we progress through life. To try to live differently, is not only a foolish way to live? It begets a pattern of thinking that anyone can seek and find ‘certainty’ in life. And you can’t. Nothing is certain. When ones accept this fact and approach the decisions they make in life as a gambler? It leads to a better process for making decisions. My Dad got a job at Ford in the late 1960’s. As I came along and the inflation of the 1970’s reared it’s head? He lost his job. He then landed a job at another Car Manufacturer in Detroit. And with the Inflation of 1979? He was laid off for 4 years before they called him back to work. In the meantime, he tried to find work where he could.
Each decision he made? Was a gamble. Looking for a payoff. But the future was unknown to him at the time he made the decision. So … he was gambling.
So to answer the question, is ‘gambling’ somehow beneath any of us? No. It’s a skill that all of us must learn in life. The more we develop that skill? The better decisions we will make.
So again, let me ask? Why do so many argue against the fact that trading is gambling?
Do they think we are somehow arguing against trading as a serious profession?
Listen …
I love trading. I love everything about it. So no, we are not arguing against trading as a serious profession.
Do ones think that we are equating trading to gambling; such that in some form we are encouraging degenerate behavior?
Nothing could be further from the truth.
To be a gambler, does not require you to be a ‘degen’, or a ‘degenerate’. A degenerate is someone who places bets without knowing, having or managing a bankroll, cannot seem to get a handle on proper chip management. In short? They … ‘swing for the fences, each time they come up to bat’, so to speak.
We are talking about becoming a good gambler. A professional gambler. No, not at a Casino. Casino’s set their odds for the games that you play against them. And trust me, if you think you have found an angle at any particular Casino game, to favor you in the long run? You haven’t. And even if by some unknown miracle you have discovered such an angle? It’s going to take a tremendous amount of work to implement, and it is only a matter of time before the Casino changes the rules and nullify any edge you think you may have gained. It is, after all, their Casino.
We are saying, that ones need to trade and approach trading, as a professional gambler. As a Casino sets it’s own payout odds, and rules by which it operates it’s games and tables; you as a trader should have done the work to know the gambling mathematics of your own trades and of the strategies that you implement. You can be the “Casino”, so to speak. Know the iterative, average payout of your trades. Of your risk. Your hit rates. The base underlying thesis of what it is you are trying to do with any given trading strategy.
We will continue this entire discussion in the next entry, as some try to claim some sort of ‘faith-based objection’ to approaching Trading as Gambling. And on that topic? I specifically, have a lot to say …