Trading = Gambling?

[ryudox]

just to add, anything that has a <50% chance of winning is gambling. In casino, the highest odd is close to 50% and this is a akin to flipping of a coin. thats why in the long run, you still lose money.

real investors or traders must aim for a higher chance of winning ie 60 to 80% success rate. then this isn't considered gambling. and in the long run, you will earn money.

Untrue. You do not need a >50% hit rate to be profitable in the long run. All you need is a dutchbook against them (like casino and Singapore Pools had against you). A 50% hit rate with 1:1 pay rate will leave you with 0 net profit in the long run as (0.5*1)+(0.5*-1) = 0. A 20% hit rate with 1:5 returns will leave you in net profit in the long run (0.2*5)+(0.8*-1) = +0.2. And to add on, you can lose money even if you are having a 95% success rate, if your risk:reward ratio is mediocre.

 

[ryudox]

In my humble opinion, you are gambling when you place bets with odds that are not in your favor. If you trade or invest when the odds are in your favor, you are not gambling. If you are a skilled card player at the casinos like the MIT card-counters, you are not gambling. However, it is very hard to have an edge at the casino. Hence, almost all people who go to the casinos are gamblers. It is easier in the stock market. One can wait patiently for opportunities when the odds are deeply in our favor, then strike. If you can do this, then this is real investing and certainly not gambling.

I wrote an article on gambling at the casino some time ago.

http://help-your-money.blogspot.com/2010/08/gambling-things-you-must-avoid-to.html

2nd this. Gambling is the same as trading, just that amateur gamblers gamble like amateur traders trade, professional gamblers gamble like professional traders trade

 

[Mecisteus]

Untrue. You do not need a >50% hit rate to be profitable in the long run. All you need is a dutchbook against them (like casino and Singapore Pools had against you). A 50% hit rate with 1:1 pay rate will leave you with 0 net profit in the long run as (0.5*1)+(0.5*-1) = 0. A 20% hit rate with 1:5 returns will leave you in net profit in the long run (0.2*5)+(0.8*-1) = +0.2. And to add on, you can lose money even if you are having a 95% success rate, if your risk:reward ratio is mediocre.

then you need the luck factor to make money with 20% hit rate. => singapore pools and casino. so can you be lucky everyday? everyday is not a sunday you know.

 

[ryudox]

then you need the luck factor to make money with 20% hit rate. => singapore pools and casino. so can you be lucky everyday? everyday is not a sunday you know.

Not talking about luck here... talking about empirical probability of 20%. With law of large numbers, you'll be certain there'll be 2000 sundays in 10000 days, or close to at least. The thing is to have proper money management aka risk management to last you through. You get it all wrong, Singapore Pools and Casino doesn't beat us through "luck" or whatsoever, they beat us because they had an edge over us. Please take a look at the website 1 of the forumer posted few posts up, where he talks about casino and their edge over us. They do not need luck to suck your money out. Edge is all they need. They can have a table with 90% odds in your favour but only pay you 10:11, you'll still lose in the long run.

 

[ryudox]

then you need the luck factor to make money with 20% hit rate. => singapore pools and casino. so can you be lucky everyday? everyday is not a sunday you know.

Although to add that probabilities associated with stocks/indices/forex/commodities etc is based on past/historical price actions and movements, so it is not theoretical probability. What Casino and Singapore Pools had is theoretical probability. Meaning they know for sure, the probability of big/small coming out for 3 dices is 50% respectively. All they need is to make sure they have an edge over you(repeating for 3 times already), but doesn't have to be a huge 1 to rip your wallet apart. Usually casino only has a 1+%-3+% edge over the bettor. For the example above, although they pay you 1:1 for either small or big, but in situations of triples, betting on either side will cause you to lose the bet. Although you might think the probabilty of getting any triples is 1/36(HOW CAN I BE SO UNLUCKY?), in the long run these magical 1/36s will show their menacing fangs on you.

 

[tanjhj]

Dear Forumers,

I have been trading for years, made and lost money, also have friends or relatives who gambles and tradings losing lots of money hence i can understand that many cant differentiate between gambling addiction on gambling or trading.
the different is just a thin line different and it needs one to have insight about their addiction before they crossed the line of no returns,

hence i changed my thesis research topics from gay/lesbian to gambling to tyrhelp ppl to develop insights themelves if they are gamblers or not.
Also what is one's perception on gambling/gamblers.

hopefully it can help you guys and also pls help my research which i hope will be useful for gamblings among the young adults and adults group in singapore considering we have 2 mega casino in close proximity.

URGENT: Need you help, this is for my final yr project.

Dear Singapore Friends (PR included),

Feeling bored? Help me do this simple 2 mins survey. TY

Help me forward to your friends please.

https://greenwichuniversity.eu.qualtrics.com/SE/?SID=SV_eg5EQwYCokprC17

 

[Doownn]

risk investing. goodluck!

 

[HappyCanOrNot]

Dyod.............. In gambling how to dyod?

 

[FENGEN]

You are gambling if you do not know what you are doing.

Look up Jim Simons.
He is one of the greatest in wall street.

His models pairing with AI leads him with one of the highest return annually.
Is he gambling? Nope.