Wednesday February 6, 2019 - 14:13:13 GMT
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The similarities and differences between stock trading and gambling
There are many people that compare stock trading to gambling. This is not something new because people have been trading in stocks for a long time now and they were able to notice the resemblance between these two activities. However, when people talk about gambling they usually do that in a negative way. Yet, the latest statistics have shown that the interest in gambling especially in online gambling is growing. There are specialized websites like Casinopedia.org where people are looking for information about the best online casino solutions which have witnessed a rapid increase in popularity in the last couple of years. So, just like in the case of gambling, people often want to speak negatively about stock trading publicly, but most of them are privately interested in these activities.
The relationship between gambling and stock trading
The traders who witness losses in this activity are usually the same ones who treat this activity like gamblers that have no strategy. Just like in the case of gambling, you can’t expect to win if you don’t analyze the game you are playing and check all the possible advantages and disadvantages of your moves. If you keep changing your cards or you are throwing dice without following any rules, you will eventually witness a loss. In case you tend to act in this way, you will turn any business activity into a poor gambling experience.
When you are gambling, you can lose or win: it’s a binary result and there’s nothing in-between. When you are betting on a player, a team or on any casino game, you are placing money on the performance of other people or even the Return per Player odds related to casino games. You don’t have any control over the outcome. Not only this, but the result is so random that there are incredibly few computer systems or people capable of predicting the results with any accuracy.
The situation is different when it comes to stock trading. One of the biggest differences is that it’s very rare to lose the entirety of the investment you’ve made. Sure, the prices of the share can go down, but this is just a percentage of their value. This means that you can mitigate the risk of capital you could potentially lose.
So, the main point here is that if you are following the rules and you have a well-thought-out strategy, you will be a winner in the stock market. It is up to you to make the right moves. Just like gambling, you should conduct research and take advice from other people who may understand and have more experience in trading. You can also check the historical movement and follow these indicators to guide your investments.
Of course, there are a few other rules that can help you become a successful trader just like a successful gambler. For instance, you must understand the basic rules and all the advantages and disadvantages of playing a certain casino game just like you have to know the ins and outs of trading in stocks of a specific sector. It’s better to start small and feel the market before you start investing more. We have a similar situation in gambling; beginners are advised to play with small sums of money or try free games before they become high-rollers. No matter how attractive some moves look like, you should never invest big money in the beginning.
Finally, a good stock trader and a good gambler have another thing in common – they don’t follow their emotions. Take some time to create a good strategy and stick to it. Know your budget and stay within its limits. You should never pay for stocks that you can’t afford to lose and, on the same theme, don’t play casino games with money that is vital for your livelihood. Gambling and trading are not anything like sprints; they are marathons that require discipline, persistence and good strategy in order to gain success.
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