It's the F/A's that are the real gamblers, IMO, as they usually don't manage risk - "but it's a great company, it'll come good one day" is the usual line.
Alternatively there is TA which if you boil things down is basically "trend following"....sounds like gambling to me
Depends on how you define gambling. There is certainly risk involved. But unlike the casino where the probability is stacked against you, it is possible to win consistently in the stock market. It's all about selecting the highest probability trades, and managing risk. Letting your profits run, and cutting losses short, ie. keep your losing trades small, and maximizing your profits on your winning trades.
Consistent winning in any persuit is about picking up a trend---or winning streak.
With trading we simply skew the numbers in our favor by letting our winning streak run and pulling the pin when a loss is incurred.
Those who arent conversent with how this can be achieved and consequently dont---consider this business gambling.
Those that are conversent with the ways of doing this either in a discretionary or sytematic methodology---get on with business.
When you place a bet you win OR lose. Your full wager is at risk.
When taking a trade we can limit loss.
You sound quite adamant about that but
Successful Gamblers also have money management systems in place...
their outlay on bets is the Equivalent of your stop loss...so theyr'e really risking the same thing.
Don't agree on what I take as your thoughts on trends, look at horse racing if you only followed trends well I hate to think
Because I take advantage of trends.
No its not the same.(Thats just one aspect ,position sizing).
If I bet on a race or a deal in cards I cant remove my bet half way through.
I can when I trade in fact I often do.
In the above example I cant keep the horse racing because its winning but I can in Trading.
I can also position size like you can gambling.
I have far more control of my $$s.
Your odds are fixed---my odds are determined by position sizing and Stop placement (R/R).
If youd like to see how following trends can bring tremendous profit I'll post a link to one of my systems which has been traded live for 6 yrs and still is-- $30k to $439K in the last 6 yrs.
And anyway why is gambling so bad ASF has been running a stock picking comp for years
Not much of a gamble really - no downside, unlimited upside...it's a free raffle ticket
Of course it's a gamble....from a lot of the reply's here people seem to be suggesting that because your taking a calculated risk it's not gambling - nonsense.
Gather more information and use informed decision making with your trades seems to be what everyone is saying...but at the end of the day (unless your insider trading) no matter how many fact's and information you have gathered there is always the unknown....and I'd suggest the unknowns are usually bigger than the knowns.
Alternatively there is TA which if you boil things down is basically "trend following"....sounds like gambling to me
Proffessional gamblers say one of the biggest problems with gambling is confusing skill for luck and too often this leads them to having an inflated belief in their skill and the system they use.
Maybe thats the case with Investors as well, over the last how many years has the stock market been bullish with overall returns above 10%. I read last year that on the ASX 51% of companies went up 49% down. So even if you took a punt on it you still had a better chance of winning than losing
Successful Gamblers also have money management systems in place...
Lets talk semantics again....isn't a trend the same as saying tendancy?
Something has the tendancy to do something...its not a sure thing????
And because someone is successful on the stockmarket they're not gambling whereas a successful gambler well theyr'e still gambling?
The similarities between gambling and the stockmarket are huge
Hi all,
I don't think there is any secrets for a trader.
To me it comes down to 1 thing LUCK
IMO any stock is a gamble
The reasons for my statements are as follows-
1. Correction/crash predictions
Can anyone on this forum honestly say they predicted the last correction/crash 6 months ago? In many cases the signs are hard to read, with little to no time to react. I own property and the signs of a slowdown are much easier to read also you have more time to act.
2. Disclosure
How many of us have been burnt by so called "blue chip" shares like ABC,Centro,AMP ect in the past? The fact is by the time the bad news is released the directors have sold out and jumped ship, leaving the mum and dad investors out of pocket.
3. Sector price movements
It only takes 1 heavyweight stock for it's own reasons to fall, then the rest of the sector will take a hit.
4. Speculation price rises
Companies rise on speculation, without any earnings or evidence to support.
FMG reported net loss of 68.43m last year and is a $10 dollar stock. Aoe trading @ 72.27 PE ratio....
5. Good news/stock drop
Companies can report good news and earnings guidance only to see the stock price drop. An example here - I own WOW which reported a jump of 20% EBITgrowth and is on track to meet full Yr guidance, it has dropped $5 in the last 2 weeks for no APPARENT reason!!
I tried to pick stocks on fundamentals like P.E ratios, EPS, LFL growth, meeting budgets ect but many times you fail, the s/market doesn't operate on evidence!!
IMHO the stockmarket operates on the following 1.Greed 2.Fear 3.Confidence
By the way I'm only an intermediate trader, and this is my view only and would like discussion to my above points.
The market/markets/horse races/footie/... whatever/, are ALL like the weather... follow them accordingly... and gambling doesn't come into it... much...
Thanks Frontiersman..
..........kauri
Call it what you like. Its the BEST game in town.
I can place my bet and once it moves out of the gates (buy trigger) then decides to turn back the other way (retrace) I can go to my bookie (Broker) and get my money back--you cant.
I can even place my bet AFTER I can see its bolted out of the gate.(Limit order).
I can adjust my odds to whatever I like (Reward to Risk).
If my horse (Stock) Turns around during the race to the line (My target) and runs in the opposite direction I can go to my bookie and grab part of my potential profits.
Not only that but I can take my partial profits and then Back it to go the other way! (Go short).
If my horse reaches the finish line (My target) I can let it keep going all the time making even bigger profits.(Let profits run).
The more people who invest in my horse (Volume) the faster it goes (Range) and the more I make.With horse racing the more who back a horse the shorter the odds!
If I like the way my horse is running to the finish line my bookie will let me put more on it---during the race!!
I can back horses to go in different directions in the same race.
My horse doesnt have to finish the race (Reach my target---or anyone elses) for me to profit.
Now imagine if you could do all that in a horse race!!
Ever heard the term MUG PUNTER----I know where they hang out!
everyone pick WOW 5 years ago, everyone is a winner.
GOLD
that's worth printing out and sticking on the wall!
Well wikipaedia put's some closure on this thread huh?
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