You don't have to swing at everything - you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, "Swing, you bum! However, the similarities are incredible and can also help you get to the core of trading success.
Trading is simply a vehicle to generate cash flow just like a business but understanding the business of gambling can help you understand the business of trading. When it comes down to trading any marketyou're dealing with odds. We've looked at situations like the Canadian Dollar or Emerging Markets which had a favorable economic picture with which you could buy a stronger currency like the British Pound or Euro.
By taking that simple example of weak commodity currencies or emerging markets in earlythe odds were tilted, but not guaranteed, for a trade that took advantage of that imbalance in the market.
As you may know, if you've gambled yourself, many people who visit casino's step up to a table to play a game with money on the line and try and earn back their costs for the hotel or flight. However, the massive casino that they've stepped into was built with the money lost by people before them who didn't understand the odds that the casino that hosts the game makes sure the odds are tilted in their favor.
If you walked up to two people and asked, is gambling a profitable business? You'd likely get two different answers.
Reasons FX Trading & Gambling are Not the Same | DailyForex
The person who doubted that gambling was a valuable and long-term method to build wealth in this example is someone with dollar signs in their eyes. Now, what if the other person that you asked if gambling was really a profitable business owned one of the largest casinos in Las Vegas?
Is Trading Forex Gambling? | Fx Day Job
Do you doubt that their answer would make money with craigslist .pdf an emphatic, "yes!
So how is trading forex gambling you take this to put the odds in your favor, just like a casino owner?
So what does a Casino boss understand that newer traders do not? Here's a starter list with their trading equivalent:. Trading and gambling are very similar. However, to benefit from the similarities you must increase your odds and t hink like a Casino boss.
The best way to trade like a casino operates is to focus on fewer trades that align with your edge and having lower volatility of performance by keeping a disciplined approach to money management so that you don't take a significant drop in your trading progress. Lastly, you should continue to take the long-view of your trading career so that you do not put too much weight on any one trade which often results in overtrading or trading too large of a position for your account equity.
Forex Trading Versus Gambling - omotohu.web.fc2.com
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Trading vs Gambling