Those unfamiliar with the trading may associate it with gambling. However, the two are distinctly different words.
Gambling is a game of Luck, while trading is about skills.
Below are some prominent differences between trading and gambling
As a Trader in the market, you are certainly exposed to its fluctuations, but you also have a massive base of historical data to fall back upon. You can analyze existing price trends to make an informed decision about incoming ones, and you can also see how support and resistance levels are progressing in the market.
A trained eye can tell which market activity is stable and which is risky, but these things need to be learned before you start trading. The same cannot be said about gambling. For example, it is highly improbable that Apple stock would ever cost $1 one day but $1000 the next. If there is to be massive growth of a Stock in the Market it is always predictable to some extent. In contrast, the values of roulette numbers in casinos are variable and cannot be predicted.
When you put your money on a number in roulette, you are at the mercy of the wheel. Trading Techniques, though are supported by science and mathematics. Before any financial decision is made, traders carry out a fundamental analysis, whereby they look at the asset’s current data and related news. They also carry out a technical analysis to better project price action via the use and analysis of charts, trends and patterns. When it comes to gambling, you don’t have access to scientifically proven methods and certainly wouldn’t have time to analyze and act upon them in the midst of a game anyway. Its just a guesswork.
There’s a story about a man who went to a casino one day and made a remarkable profit. Feeling lucky. He returned there the next day, made a small loss, and continued playing in an attempt to recover it. In the end, he lost all the profit he’d made on the first day and then some. Big wins can come easy, but they’re only an illusion that ropes you into sinking more money. Trading, on the other hand , is a game of skill and discipline. The focus is on managing your risk and protecting your capital, rather than rolling the dice. Therefore, the profits might be slower in trading than it is gambling, but they are also safer and calculated.
If a casino provides a lot of quick profits, gamblers keep coming back to invest money until they’re penniless (and some don’t even stop there). Gamblers usually opt for the bets that can yield high and quick profits, but the illusion of doubling earnings in no time with no effort always mis-guides them. Trading, on the other hand, requires discipline. That being said, trading can still bring a lot of excitement, just don’t let it control your decisions and always trade wisely. Excitement can be great disadvantage in trading, as it can let you into rash and irrational decisions. From a psychological point of view, that is crucial difference between gambling and trading
This point most strongly captures the difference between trading and gambling. As a gambler in a casino, you have limited control over a game’s outcome. You purely try to play against the odds and hope that the cycle of probability will work in your favor. As a trader, you have more control. Discipline is your defence against market uncertainty. You also have the advantage of changing strategy if the market doesn’t go according to your analysis. The sheer amount of options that traders have in analyzing, reducing risk and implementing new strategies distinctly sets trading apart from gambling. Moreover, it’s important to remember that a casino is there to make money. Meanwhile, nobody owns that market, so no single entity profits from a trader’s loss like a casino does from patrons.
Trading and gambling are different realities. There is a lot more science, discipline and control over outcomes when it comes to trading, while gambling is more like throwing caution to the wind and acting upon impulses.
Keeping a trading journal will help you regulate your emotions so they don’t interfere with your decision making process, while maintaining strong risk management and money management plans whill grant you more control.
Stock in Talks is the perfect platform to grow as a trader. Our array of tools, strategies, indicators and studies along with our educational blog and webinar series, are all there to support you in your trading journey.
Start trading with Stock in Talks by following our trading signals that we provide on our telegram channel as well as through various sourses to test out our strategies at absolutely low risk.