Gambling

Trading is not just about numbers, trading systems and having a trading edge. Since we’re human (and we aren't using mechanical high frequency algorithmic trading) we have to contend with our psychology while we are trading. You've probably heard or been told many times that it is important to trade the markets as emotionless as possible - just like a robot. Trading must be a boring process of executing your trades.

Here is an article about a gambling addict who lost $30 million and is suing the casino for it. Imagine if you, the trader, can sue the house – the stockmarket for any huge losses. There'd be no markets since losers would continually sue the markets. Trading may be gambling but any losses incurred are totally your responsibility.

Trading Stocks is Gambling After All... So Why is Gambling Bad? I want to return to the question of share trading being gambling. Is share trading gambling? Previously, I argued that share trading comes pretty close to the definition of gambling, but the fine line is that share trading often involves a business plan and a risk management scheme. Others may argue that professional gamblers have these two elements at play. They have a plan of attack - their game, and a risk management strategy. I was reading this article about Joe Hachem who won the World Series of Poker in Las Vegas last year. Here's what this professional poker player said: "To me, it's a business," Hachem said. "Over the long run, poker is close to 70-30 in terms of skill to luck. So, I'm not going back to see if I can get lucky." Which is interesting because that is a similar attitude that a professional trader would have towards trading the stock markets.