Why do people always compare stock trading with gambling?

Gambling Definition: Take Risky Action in the Hope of the Desired Result.

Shares trading definition: Buying and Selling of Company Stock – or Derivative products based on company stock – in the hope of making a profit.

Let’s revisit a very popular story we heard in our school days.

Interested to watch a video of the whole story? Here it is: 

Story:

One afternoon, a fox was walking through the forest and spotted a bunch of grapes hanging from a lofty branch. “Just the thing to quench my thirst,” said the fox.

Taking a few steps back, the fox jumped and just missed the hanging grapes. Again, the fox took a few paces back and tried to reach them, but still failed.

Image Credit: The Fox and the Grapes

Finally, giving up, the fox turned up his nose and said, “They’re probably sour anyway.” Then he walked away.

MORAL: IT’S EASY TO DESPISE WHAT YOU CANNOT HAVE

Swami Vivekananda once said:

One who can’t understand or attain something, would spread hatredness about it

This case of comparing trading to Gambling is one such case.

 

Trading is said to be trading, and not Gambling only when:

• You adhere to a set of Preset Goals.
• You are utterly disciplined with strategies.
• You always believe, your strategy works. No one other than you can believe the strategy, you’ve set.
• You are a good Risk Manager and have good Stop Losses in place.
• You adhere to your Stop Losses and don’t blow them even once.
• You are robotic in your decisions and don’t give up to Gut Feeling, that the lost trade will come back and recover.
• You are emotionless and take trades only by the technical indicators and what charts has to say and show.

 

What are the similarities between Trading and Gambling?

• You can lose money very easily.
• You’ll try your luck again.
• You’ll always believe, tomorrow is the Next Big Day in your life.
• Though tomorrow never comes, we remain optimistic to lose all our money.
• It’s very easy for advisors to lure you of easy money for giving tips.

 

What Differentiates Trading with Gambling?

• My mentor Mr. Sam Hooda, always said “If you can know for a fact that you can win at least with 51% probability, it’s not called Gambling”
• With trading, we know for a fact we go in the direction of a predetermined path by knowing technical charts behave in one such way.
• Even the Elephant will be tamed, but sometimes it gets wrong and causes a ruckus, so is the market. It’s predictable by the near past and its events in the past, but sometimes, it causes ruckus for no good reason.
• Traders, lose money daily thinking we would get a winning day tomorrow and when the winning trade comes they book out very soon in the fear of losing, but with gambling, it’s either a win or lose, and about 90% of the times you lose and 10% you win.
• If trading with the right technical charts and with discipline, you can achieve up to 80% winning trades on any given day, no matter the mood of the market.

Traders are always in search of a Next Big Greatest Indicator which can make them easy money.

They are always in search of the next shiny object when they’ve to only concentrate on one indicator and master it.

Bruce Lee said “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.

If you are a Jack of All and Don’t master any one indicator, you are a Dud and fit for nothing.

Gone are the Ancient days when a leader had to know all the 64 Kalas.

Now is the time when you master one and care about no other one.

There are about 100’s of indicators which are available on your technical charts. Can you master it all?

Its a saying that Practice makes anyone perfect! But do you practice one thing and master it?

Or

Can any Bank deposit give such kind of return? Never, because they have to keep the profit from your money too.

So the bottomline is start to trade with certainty from Technical Charts and understand that Market is like God Krishna, Technical Charts are like Bhagavadgita.

If you can maintain this mentality then Share trading is no more said to be gambling because you are disciplined to Respect God (Stock Market) and Abide by his Rules (Technical Charts).

This is my short description about Trading and Gambling Analysis.

Happy Trading. Happy Making Money Trading!

Learn to Earn ₹1500 with Certainty Trading Nifty Options Intraday