Is forex trading gambling | Difference between a trader and a gambler | who is a trade gambler
- 3 years ago
In this video, I will share my knowledge on the difference between a trader and a gambler, who is a gambler, who is a trade gambler, trading is gambling or not, similarities between trading and gambling, what forex gambler think, what is organize speculation in forex. To understand this lets us first understand the difference between a trader and a gambler, and then let's see if trading really is gambling.
Also at the end, I am going to share an amazing technique that will help you know if you are trading or gambling so make sure you watch this video till the end.
So, who is a gambler?
A gambler is a person that puts money or anything of value at stake, on an event that has an uncertain outcome.
The gambler hopes to win something out of this activity by taking a chance on the event and it is mostly based on luck.
Who is a trader?
In the most general sense, a trader is a person that buys and sells goods with the hope of making a profit in this process.
In today’s time, almost every person has traded something or the other at some point in life.
From the person who sells milk to the person who sells gold everyone in today's time is selling something.
In the financial sense, a trader is a person that buys and sells a financial product or an asset on the financial market. They could engage in this activity for themselves or on behalf of an institution.
In trading, there is always a risk involved. And for every risk taken, the trader will hope to earn a profit.
Now, we have seen what gambling and trading are and have seen that both involved stake, risk, and a prize. But does this make trading and gambling the same?
No, there is a difference between the two with respect to the approach a gambler takes towards gambling and that the trader takes towards trading.
The sole thing that differentiates gambling from trading is the ‘why’ factor. Why does the trader think that the price of the asset will increase or decrease?
It is a commonly known fact that every game that is present and functioning inside a casino has its odds titled towards the casino or the house. The casino runs these games with odds in their favor, in the short term they will lose money but in the long term, their odds will play out and they will always be profitable.
This is another difference between a pure gambler and a trader that is involved in organized speculation. A gambler thinks that the odds of him winning or losing is 50-50 but in reality, all games are not built with only 2 outcomes with equal odds.
Hence, the odds are stacked against the gambler and in the short term he may win and earn money but if spread over the long term, the gambler will lose money.
A trader that indulges in organized speculation knows about the odds that are in his favor in the trades he takes. These types of traders will have a proper rationale behind the trade which is based on some sort of analysis that they perform before committing to the trade.
Also at the end, I am going to share an amazing technique that will help you know if you are trading or gambling so make sure you watch this video till the end.
So, who is a gambler?
A gambler is a person that puts money or anything of value at stake, on an event that has an uncertain outcome.
The gambler hopes to win something out of this activity by taking a chance on the event and it is mostly based on luck.
Who is a trader?
In the most general sense, a trader is a person that buys and sells goods with the hope of making a profit in this process.
In today’s time, almost every person has traded something or the other at some point in life.
From the person who sells milk to the person who sells gold everyone in today's time is selling something.
In the financial sense, a trader is a person that buys and sells a financial product or an asset on the financial market. They could engage in this activity for themselves or on behalf of an institution.
In trading, there is always a risk involved. And for every risk taken, the trader will hope to earn a profit.
Now, we have seen what gambling and trading are and have seen that both involved stake, risk, and a prize. But does this make trading and gambling the same?
No, there is a difference between the two with respect to the approach a gambler takes towards gambling and that the trader takes towards trading.
The sole thing that differentiates gambling from trading is the ‘why’ factor. Why does the trader think that the price of the asset will increase or decrease?
It is a commonly known fact that every game that is present and functioning inside a casino has its odds titled towards the casino or the house. The casino runs these games with odds in their favor, in the short term they will lose money but in the long term, their odds will play out and they will always be profitable.
This is another difference between a pure gambler and a trader that is involved in organized speculation. A gambler thinks that the odds of him winning or losing is 50-50 but in reality, all games are not built with only 2 outcomes with equal odds.
Hence, the odds are stacked against the gambler and in the short term he may win and earn money but if spread over the long term, the gambler will lose money.
A trader that indulges in organized speculation knows about the odds that are in his favor in the trades he takes. These types of traders will have a proper rationale behind the trade which is based on some sort of analysis that they perform before committing to the trade.