Question
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Should i trade like a casino?
10 Answers
<p>Trading is similar to gambling in the sense that you are putting down money, with a risk of losing it and betting on winning more. Unlike gambling, there are different chances of succeeding. The chances a stock goes up is 50% and the chances a stock goes down is also 50% (simplistically speaking).</p>
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<p>If you don't know what you are doing you are playing the game with less than 50/50 odds due to trading fees and costs. If you know what you are doing and you have the skill, experience, and patience that is needed you are not gambling. You are running your own small business.</p>
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<p>If you understand market dynamics, you have a good understanding of fundamental analysis (the way Warren Buffet invests) and you also have a good understanding of technical analysis which is charting, resistance/support lines, plus hundreds of other calculations made from price, open, close, high, low, volume. Then you change your chances of winning or losing, there lies the biggest difference between gambling and trading. With trading, you can set yourself up to win more than you lose. For instance, your risk management only allows you to enter trades with a 1/3 risk-reward ratio. If you make 10 trades with a …</p>
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<p>Gambling is going to a casino putting your coin in the machine pressing the button then waiting to see if you have won or lost. Trading on the other hand is about probabilities once you have done your fundamental / technical analysis, Price action, Checked your RSI checked your stochastic worked your Bollinger band looking for overbought or under values, How much you are going to put up as risk (money management) to see if the trade will work or not.</p>
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<p id="isPasted">Investing and gambling both entail risking capital in the hope of making a profit.</p><p>Investing, by definition, is putting your money to work so that it can grow in the future and thus has a positive expected return even though there are risks.</p><p>Gambling, on the other hand, is defined as betting on chance games without any ability and has a negative expected return.</p><p>A lot of new traders see their involvement in financial markets as a trip to Las Vegas, hoping that the stack of money in their pockets could be exchanged for a larger stack when they leave. …</p>
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