Is Trading The Same As Gambling?
Firstly, to be clear the statements made within this blog post are our collective opinions based on our personal experience and the results we have had as well as our clients. We strongly believe that all the following information and statements will give you the most truthful and transparent answers to the above question.
Firstly, you need to identify the difference between risk and gambling. You could put your savings in a bank account for example which you would think is safe; there could then be a large financial crash causing inflation to rise meaning your money has now depreciated in value as it will not be worth its previous value. There is risk in everything, we just don’t see it. The banks invest your savings through investment bankers and earn fortunes, but do you see any of that return.
Don’t believe us? – Google any bank and see if they have investment bankers!
For Some It Is and For Other It Isn’t:
No matter what sort of trading indicator or strategy you use there is will always be a risk of losing money; this is due to the markets being so heavily affected by human psychology, news events, social and political policies, natural events etc… However, by implementing a good risk management structure you minimise the risk of large losses dramatically; then by having a good trading strategy which allows you to await confirmation before entering a trade once again greatly reduces the risk of a loss trade. Those who operate their trading in this manner will say trading is not gambling; they are also most commonly the ones who have put the time and effort in to learn and practice trading as much as possible.
By understanding the rationale behind why your trade failed will help you improve as there will always be a reason as with gambling it is more based upon chance.
On the other hand, those who fail to take the time to learn properly and rush in headfirst, with no risk management, no strategy and very little knowledge turn trading into gambling. As they are relying on chance and fortune to make their trade successful and to have a good entry and exit points.
Our Advice – Don’t Be That Person.
By minimising risk and understanding the rationale behind trading and the driving factors, it is no longer chance it becomes fact. Do not rush to jump into trades or to begin trading as you are then gambling and relying on luck; ultimately meaning you will more than likely take some serious losses. Have a trading plan in place, and a risk management plan which you have practiced with and trust.
Thank You For Reading