Is Trading the Same as Gambling?
Traders are not the only financial market participants. Other market participants may wish to hedge positions, or buy and sell forex to facilitate trade. Even traders have different timeframes and objectives. This makes the market quite different from the casino, which only has croupiers and gamblers, who generally have the same timeframes and motivations.
Sometimes the distinctions blur with professional gamblers who enter a casino to count cards and apply probability theory. Generally these gamblers are very unwelcome and anyone who consistently wins is banned. The casino makes it money out of emotional, thrill seeking gamblers, not those who are there purely to make money. In contrast, there is no mechanism to ban winning traders from the markets – if that were so, there would be no point in trying.
You can see that although there are some superficial similarities, trading is quite different from gambling. The main difference is that you can succeed in trading – there is no house advantage like that found in every casino. In fact, by developing a positive expectancy trading system, you can have your own house advantage! Markets, unlike casinos, simply exist to facilitate trading, not to extract money from traders (although brokers do act as middlemen and take a commission).
Similarly, the motive of successful traders and gamblers are actually quite different. Traders trade to win, gamblers gamble for entertainment.
In conclusion, trading is not gambling. You can lose with trading, as in gambling, but the fundamental purposes of each activity are not the same.
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