Is Trading a Form of Gambling?Is Trading a Form of Gambling?

Trading and gambling are definitely not one and the same thing, no matter what critics say. So, traders who are handling stocks in the stock market are not depending on their luck as do gamblers. Trading and gambling may have a few similarities but the principles underlying both are quite distinct.

Trading is not like playing with dices whereas gambling is definitely a zero-sum game where you play with odds. To trade, you need to research and evaluate past data but in gambling no background research is needed. Unlike in gambling, trading will not have any ultimate win or loss. Companies will continue innovating products to stay ahead in the race; this will trigger a rise in their stock prices. As a stockholder, you will automatically enjoy higher gains. So, trading cannot be equated with gambling.

Trading demands in-depth knowhow of how trades happen, technical and fundamental analysis, and application of mathematics for forecasting trends. Without proper reason and logic, trades cannot happen. As a trader, you must follow a proper strategy, decide how much to invest, and what risks you can take. Every trade decision is preceded by a proper analysis of data. Moreover, traders need to know the right time to enter and exit trades. All these things are decide beforehand. These trading decisions and process are also carried out automatically with the use of automated trading robots like the Bitcoin up trading app. These bots executes automatic transactions on behalf of traders. In gambling, there is no such calculation involved and no strategy to follow.

Trader need to be patient and disciplined when making trades. Since markets can be volatile, they will always stick to plans rather than playing with odds as a gambler would. Unlike gambling where your focus is on winning a one-time jackpot, trading is about ensuring a steady flow of money. So, as a trader, you should not expect to enjoy wins every time. It is best to follow a long-term plan to enjoy consistent profits.

For trading successfully, finding out as much information as you can about a company is a wise move. But in gambling, you can win at poker even without taking a peek at the cards n your hand. So, trading is nothing like gambling.

Gambling is more about how to get rich quickly; this approach will never work in trading or investing. Rather, your focus as a trader should be on coming up with a plan to make profits over time and learn from mistakes. Every trade provides a learning experience from which you can gain inputs to make better trades next time.

Trading gives you a feeling of ownership; when you buy stocks of a company, you feel like you own a portion of that company. It’s like have an ownership of the assets, profits, and debts of the enterprise. This explains why it is so important to be able to gauge the company’s profitability.

To sum up, both traders and gamblers will consider the odds and try to find an edge for improving their performance. For instance, gamblers study behaviours of players in games like poker or Blackjack. This helps them to figure out their betting strategy. Likewise, investors or traders also study charts to predict stock prices for the future. For them however, information is much easily available online because of company documents filed with SEC. Risks are inherent in both trading and gambling, but without risks, you cannot hope to make money. Both however know how much risks they can afford to take. So, whether you trade or gamble, you must know your appetite for taking risks.