Peter Smith
The same could be said about casinos. We all tend to associate casinos with the 20th century. It was the era of Las Vegas and Macau. Many of the most recognizable casino brands launched during the past century. But gambling itself can be dated back to the ancient world.
Today we often see people talk about trading and gambling as if they have a lot in common. Some even go so far as to say that trading is a form of gambling in and of itself. To say that is a misnomer. But there are certainly similarities worth exploring.
Both Greatly Benefit from the Internet
The world wide web has drastically changed the way we engage with the modern world. A lot of the developments we’ve seen come about due to the internet we take for granted today. Like the growing success of online casinos. The success of the digital casino market speaks for itself. Billions go into iGaming every year. Affiliate websites experience a lot more traffic than ever because there are a lot of new customers hoping to discover the best online gambling platforms.
Trading has also benefited greatly from the new era which we inhabit. The practice was widely seen as something reserved for the privileged few in the past century. But digital platforms allow anyone to access the stock market. These platforms make getting into trading quite simple for inexperienced people who want to explore the market. Another way in which the internet benefits trading is by introducing new markets.
The most successful trading market today is foreign exchange. Stock trading is next in line. These two markets have a long history in the world of trading. But the third most popular market worldwide is crypto, which only came to prominence recently. It is fair to say that crypto trading is not even two decades old yet. Already billions of dollars’ worth of crypto is in circulation all over the world. Bitcoin and Ethereum are at the top of the list. But there are many who trade lesser-known altcoins all over the world.
Probability is at the Core of Both
It is not a great idea to enter the casino thinking that victory is in the palm of one’s hand. The industry is known far and wide for its volatility. Many of the most popular games at online and land-based casinos even measure volatility and inform the players what they can expect. Even professional gamblers visit casinos and tournaments knowing that they may lose it all if Lady Luck ends up being a fickle companion that night.
Trading is in much the same predicament. Probability is at the core of the practice. The best traders do a ton of research and study the markets thoroughly. They take every single piece of data into consideration before they make a final investment. But they still understand that there is no such thing as a guaranteed victory in the realm of trade. Every good trader needs a bit of luck behind them, guiding them through thick and thin.
Some new traders may misinterpret the concept of luck. They might believe that all trading comes down to chance. The truth is that research and study is still an important part of both gambling and investing. Gut feelings so rarely end up working out the way we expect them to. That is why we would recommend studying the work of the best traders in the world before you embark on your own journey. These people have a lot to teach the world; more often than not they are quite willing to share their secrets.
Risk Management and Emotional Control
Risk is at the core of both activities. But what is truly fascinating is the overlap in how gamblers and traders perceive risk. The most obvious connection lies in how both handle the capital that they have at their disposal. We are working with a limited amount of money in both gambling and trading. That means that managing said money is crucial. Nobody lasts long in either markets without understanding the importance of money management.
A gambler and a trader must know when to make a wager and when to take a step back. Kenny Rogers said it best in his seminal song “The Gambler;” “You have to know when to hold ‘em and know when to fold ‘em.” Traders and gamblers might go about money management in different ways. But they will always formulate some sort of plan before they ever engage with the market. The goal of both is the same at the end of the day; stay in the game and avoid getting knocked out before your time. One bad move can mean your end.
A degree of emotional distress is always involved when it comes to money. Money is usually at the core of most of our worries. It often is the reason that many couples argue and even split up. It is only natural that it can cause some severe issues for both traders and gamblers. But a good trader must learn how to handle the pressure that comes with the job. The exact same truth applies to gamblers as well.
Handling the mental state that arises from gambling and trading is the toughest challenge that those involved with these markets must overcome. Even the best of traders with the most thorough plans fall prone to emotionality. It is easy to lose all confidence because of one bad day. The results may lead to giving up on strategy and indulging in impulsive wagers and purchases. These are the sorts of mistakes that can lead to serious financial ruin and unimaginable problems.
That is why we always recommend to maintain some level of control over your emotional state when trading or gambling. Remember to engage with both markets responsibly and in moderation. Avoiding stress is the best way to handle the problem.
Peter Smith
