Trading vs Gambling

Asad Dossani
I remember my first visit to a Las Vegas casino. The lights were bright, and stayed so day and night. The casino smelled of cigarette smoke. Everywhere around me, people were gambling in various forms. This included slot machines, black jack, poker, roulette, and so on.

I wondered why so many people chose to gamble. Especially when they knew that the odds were stacked against them. Yet, the casino was full and buzzing at night. And not just the one I was in. Across Las Vegas, numerous casinos are filled with people losing money. Day in and day out, year in and year out. How do we explain this?

I had a strong impulse to join the gamblers. At the same time, a voice inside my head kept reminding me not to gamble, as the odds always favoured the house. Still, the impulse remained.

I didn't realise it at the time, but when I started trading, I was fulfilling that same gambling impulse. But this time, the odds were my favour.

The fundamental difference between trading and gambling is the expected winner. When you gamble, the house always wins in the long run. When you trade, it could go either way. But if you are a good trader, you can win in the long run.

Other than this one point, trading and gambling are very similar. Both involve risking money in order to make more money. And both involve considerable uncertainty in the outcome, at least in the short run.

If you've ever had an impulse to gamble, my advice is not to do it. But rather than ignore it, you can channel it into something else. You can channel that impulse into trading.

Some years later, I met with a relative of mine who regularly went to casinos. He explained to me that he had a gambling impulse. And going to a casino was more about entertainment rather than making money. Provided he only played with a small amount, he didn't care much about the outcome. But he enjoyed the process and the rush that gambling provides.

Do you have a gambling impulse? Share your views in the Club or share your comments here.

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5 Responses to "Trading vs Gambling"
hoshangdehnugara
27 Nov, 2015
yes i like to gamble on same lines small amts without consequenciesLike 
RAVINDRANATH
18 Nov, 2015
My view is as follows. In Gambling whatever money you have lost while gambling is lost for that day. you may make more money or loose more money when you gamble next time & the situation is uncertain again. While in trading, if your investment value goes down ( if you have made the right choice), it is only a notional loss as long as you do not sell it & if you keep your investment intact without medling it for a long time ( as investment is for long time ) the same investment can give you good returns over a long time. There is an oppertunity to covert your notional loss into REAL GAINS.Like 
ATRI
17 Nov, 2015
YES I HAVE SOME EXPERIENCE (BITTER) IN TRADING IN MCX. ALTHOUGH BY CHANCE I WON INITIALLY, BEING A PERSON IGNORANT IN THIS FIELD AND DEPENDING ON MY UNGUIDED SENSE AND / OR UNSCRUPULOUS TRADE ADVISERS WHO FLOOD THE MARKET, I LOST A LOT. THEREAFTER, I CAME ACROSS SOME WRITINGS BY THE LEGENDARY INVESTOR WARREN BUFFET. NOW I TRY TO FOLLOW HIM BY AIMING LONG TERM RETURNS RATHER THAN MAKING QUICK BUCKS. THANKS & REGARDSLike 
R S Narayan
17 Nov, 2015
Trading is an intelligent gambling where in you make Technical/Fundamental analysis before entering in to the ring. You can also use mathematical models like STATISTICS,CHARTS and Business knowledge etc while trading and take corrective action like averaging, stop loss etc when the tide or wind blows in an unexpected direction and mitigate your losses However when a person enters a trading ring without arming himself with the above tools he is gambling and it is like any other Casino I am trading for the last 20 years and I can vey positively say I was gambling for first 15 years. But I could see the difference in last 5 years where in the shift is quiet noticable from gambling to trading R S Narayan Like 
Sameer
17 Nov, 2015
Give one month free trial then after watching your performance I will definitely join you. Thank you, SAMEERLike 
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