You do not know your expectancy before trading though, you can guess it, but essentially you are always gambling based on the assumption that you have a positive expectancy.
HFT absolutely are gambling, a lot of high frequency trading fails and loses a lot of money, in the markets anything can happen and that uncertainty is applicable to any trader.
Poker is also gambling, and you can have a positive expectancy.
I know 'gambling' is a dirty word that we want to avoid but it's best you accept and work with the fact that trading is gambling than try to pretend otherwise. This isn't a bad thing, it simply means that the markets are uncertain and do not always have underlying logic or reasoning, knowing this - we can understand what we do not know and use this to benefit our decision making without reasoning flaws or behavioral illusions.
To those that try to discourage you to 'gamble' in the markets, tell them plain and simple: You choose risk and adventure than stability and boredom, and are prepared to accept your fate as winning, or losing.
Finally, you must make a choice: Are you going to take on the challenge of consistent profitability, knowing the possibility you might fail, or will you not - it's really that simple, once you've made that choice and committed, it doesn't matter what others think.
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Also, if you haven't done so, recommended to check www.tradingschools.org
I don't believe it's a completely random walk because the big money really move the markets and often try to fool retailers. However, the edge is so fine to walk to be profitable in a session i.e.
trading is so hard, it approaches gambling.
Last edited by Cloudy; September 15th, 2016 at 05:51 AM.
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Funnily enough this is exactly what i tell them. That its simply strategy game of chance and managing risk. I then point out getting out of bed is a risk, the job they take and that life itself is a strategy game. We all make choices based on risk/ reward/ strategy in pretty much everything we do. Then point out plenty of large cap stocks go bust and that nothing is certain. Its fun watching them trying to process life being a real time strat game, conversation about trading usually ends there. Until next time we catch up, they usually get curious after that.
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It's an educational thing. We are brought up, taught and conditioned to all do the same thing: Study and pass exams where there is a right and wrong answer, find a job, where there are good and bad jobs, do the right or wrong things, cross the street at the green light etc.. I am not getting into a philosophical pointless conversation here pretending there shouldn't be any rules or right or wrong, but simply that we are not taught to deal with uncertainty and we like rules and the right way to operate. Gambling has a lot to do with luck. So that's why it is called gambling, there is no rule, you just need to be lucky. Trading is not about being lucky, but there is an element of risk attached to it.. Just as you could be unlucky and be in a "normal" deemed safe job that doesn't work out. Nothing is risk free. And I would keep in mind the saying "the harder I work the luckier I get" too.
As a Christian, people that I used to hang out with from same church always pointed fingers at me, and for a long time I was very confused and even worry about what people said about me, I just didn't know.. as years went by I figure it out. Now I chill and give 2 shits what anyone thinks.. most people have no idea about running a biz let along any complex ideas of risk management, strategic planning or testing.. they can't even manage their time properly but they are happy to comment how stupid what you'r doing is.. and that's normal cause that's people so whatever.
here is my definition..
-- Gambling is the action of squandering resources you have stewardship and/or ownership over, a combination or a series of reckless decisions made from emotions of greed and avarice that bring destruction, and are done without any labor, strategy or planning whatsoever in any and all facets of life.
Last edited by eminijalapeno; September 20th, 2016 at 03:15 PM.
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As Cloudy mentioned above, witnessing live trades was a help. However, online instruction and even "live" videos was at first concerning to me. Almost all of the education in trading you can find is associated with someone who has something to sell you. I was worried that the "profitable retail daytrader" was this unicorn suckers like me chased while brokers, signal sellers, and book sellers profited. I have, of course, since gotten over this fear. The material provided by FT71 was pivotal for me. Maybe I was just at the place in my learning curve that the way he presented his discretionary process from start to finish made logical sense to me. I have gained much confidence in my ability to develop my own process after observing his approach to trading.
What also helped me gain confidence in the legitamcy of the retail daytrader was finally defining for myself what an "edge" is for a discretionary trader. Now, as I sim trade my own process, I know what I am looking for is average profits that are larger than average losses. That, paired with losing no more than 50% of the time, would be a non-luck based edge. I feel much more optimistic about my future as a trader and comments about it being gambling make me feel much less insecure.
On a side note, it is always a good idea, in my view, not to pay too much attention to stats when it comes to success: I tend to have a 80% ish more or less win rates with a number of small but decent wins over a lesser and smaller number of losses and that works out as being on average profitable on a daily, weekly, monthly, yearly basis. One could have a 80/20 win ratio and still not be profitable as loosing traders are much larger than wining trades... or have a 20/80 win ratios with many more very small loosing trades and fewer very large winners. Sorry for stating the obvious here but again, it is all down to what works for you and not about the norm, the stats, etc.
indeed....... what I stated was specific to what I have built my own trading process around. An "edge" can come in different forms. My main point is, I think you have to have some other objective than just be profitable. I think you have to define for yourself why you expect to be profitable and make that your goal. Being profitable in and of itself does not mean anything. It could be one lucky over leveraged trade..... which is no positive expectancy at all.
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Sure, by profitable I mean bring profitable daily/monthly/yearly, not just a lucky patch, develop oneself until you know you are and feel very confident about it. As well as trading my own proprietary account I have been working for a company selling to institutional trading desks across Europe, so I have to say being in it (although they work in a complete different way of course), helped me to develop in the right direction and feel confident about it as a lot of it comes down to understanding the markets and participants.