Trader or Gambler?

[ShaunWhite]

I must say the 95% figure interests me too - how is that derived?

I think it's one of those stats that's never been defined (is it lifetime/does it mean those above a certain turnover etc) and the stats probably don't exist anyway.

The figure may have originated from a Betfair account manager but it's apocryphal.

[Derek27]

I've watched Pete, Caan Berry and other 'traders' on YouTube, etc. The message is always trading, getting in to and out of the market with a profit. Again, it's always profit - never losses. For me, as soon as you bet money on an event - ANY event - then you are risking your money. In other words, you are gambling.

Which takes me to an associated issue. We see it all the time in various media that gambling is an addiction: check out Gamble Aware, etc. The problem is purely financial and emotional. We keep reading that 95% of gamblers lose. Where they get 95% from God only knows. My attitude is to keep a certain emotional detachment from, in my case, Betfair. Of course, I use Bet Angel which gives me the edge but at the end of the day, as soon as I go in and snipe a possible winner, I am gambling.

So are you a trader or gambler?

There's a lengthy thread about it on this forum. Trading is a branch of gambling so all traders are gamblers but not all gamblers are traders. (A lion is a cat but a cat's not necessarily a lion).

But within that understanding, and within the trading community, we make a distinction between betting and trading to indicate the nature of our gambling. Claiming to be a gambler on here when you mean a trader may cause confusion and lead people to believe you're a bettor.

[TipTopTrader]

You watch or read anything about trading stocks,etc and they come out with the same number.Peter did a video on it and I think he said it was about 85% lose short term under 2 years or so and the longer the time period the higher the stats because short term luck etc was taken out.

Also we need to take into account defining what you call long term success.If you're making a good living or making a few dollars a week.

[stueytrader]

I must say the 95% figure interests me too - how is that derived?

I think it's one of those stats that's never been defined (is it lifetime/does it mean those above a certain turnover etc) and the stats probably don't exist anyway.

The figure may have originated from a Betfair account manager but it's apocryphal.

It may be related to some previous records from Betfair, yes. Though I also see this (or very similar) cited in sources that would pre-date Betfair even, for example discussions about how many financial day-traders are ultimately successful (only 5% allegedly...)

I agree though, that it's actually a figure plucked from no-where, as it's not clearly defined (what is success etc) and who on earth would even have enough stats to support the specific figure? i.e. no-one can know the entire pool of traders/gamblers I would say.

I must admit, I don't like the stat itself, as it presents a very negative image.

[jimibt]

I must say the 95% figure interests me too - how is that derived?

I think it's one of those stats that's never been defined (is it lifetime/does it mean those above a certain turnover etc) and the stats probably don't exist anyway.

The figure may have originated from a Betfair account manager but it's apocryphal.

It may be related to some previous records from Betfair, yes. Though I also see this (or very similar) cited in sources that would pre-date Betfair even, for example discussions about how many financial day-traders are ultimately successful (only 5% allegedly...)

I agree though, that it's actually a figure plucked from no-where, as it's not clearly defined (what is success etc) and who on earth would even have enough stats to support the specific figure? i.e. no-one can know the entire pool of traders/gamblers I would say.

I must admit, I don't like the stat itself, as it presents a very negative image.

one could say that the 5% *image* could be also happily perpetuated by those enjoying success - a smaller club is a more profitable club, therefore restricting membership by proxy maintains the status quo.

[stueytrader]

one could say that the 5% *image* could be also happily perpetuated by those enjoying success - a smaller club is a more profitable club, therefore restricting membership by proxy maintains the status quo.

Yes, that is a kind of positive take on the 5% mythology. But, couldn't it also mean more people are put off trying, and ultimately damaging for the whole economic system, lower liquidity etc?

[jimibt]

one could say that the 5% *image* could be also happily perpetuated by those enjoying success - a smaller club is a more profitable club, therefore restricting membership by proxy maintains the status quo.

Yes, that is a kind of positive take on the 5% mythology. But, couldn't it also mean more people are put off trying, and ultimately damaging for the whole economic system, lower liquidity etc?

.. in short, it's a subjective stat that's kinda plucked from the air (or more likely, borrowed from the world of finacial day trade failure). doubt many here would be willing to particiate in a straw poll that identified them as being succesful or not. likewise, an anonymous poll would never reach a true figure either... catch 22

[stueytrader]

one could say that the 5% *image* could be also happily perpetuated by those enjoying success - a smaller club is a more profitable club, therefore restricting membership by proxy maintains the status quo.

Yes, that is a kind of positive take on the 5% mythology. But, couldn't it also mean more people are put off trying, and ultimately damaging for the whole economic system, lower liquidity etc?

.. in short, it's a subjective stat that's kinda plucked from the air (or more likely, borrowed from the world of finacial day trade failure). doubt many here would be willing to particiate in a straw poll that identified them as being succesful or not. likewise, an anonymous poll would never reach a true figure either... catch 22

In short I think we're all pretty much agreed the actual stat is fairly baseless, yes.

[Crazyskier]

Trading is a branch of gambling so all traders are gamblers but not all gamblers are traders. (A lion is a cat but a cat's not necessarily a lion).

Nail head firmly hit

+1

CS

[Derek27]

Perhaps the 5% figure was invented to make us feel good about ourselves?

[spreadbetting]

The 5% figure came from Betfair years ago and was supposedly the percentage of accounts in profit so nothing in depth. Could easily include Grand National type punters who'd signed up and only bet once win or lose, when you've got shareholders every account counts. They also released the fact under 0.5% of account holders were affected the premium charge which is probably a better indicator of how traders may be performing as it'd be unlikely to hit straight gamblers. I think they released %'s for the higher rate PC payers too when they were looking to justify the increased rate, can't remember off hand what it was though.

[ShaunWhite]

In short I think we're all pretty much agreed the actual stat is fairly baseless, yes.

Yep, most of these urban myth stats are like that.
Break it down and what's been measure and/or the source of the info are fuzzy at best.

Take the recent Serena Williams thing.....Are Women treated more harshly than men? ......Totally pointless looking at %ages about who's been given what penalties....you'd have to watch every single dispute on vid and make a subjective judgement about 'harshness'.

5% suits everyone, the winners feel special and the losers don't feel so bad.

[Jukebox]

I have a friend who is a 'gambler' - he puts a score on his team just before ko on saturdays (regardless of price) and then watches them play while having a few beers. He might lose his score - he might double it or more. He might sometimes dance around the room watching the slow motion replay of a crucial goal.

I think I'm a 'trader' - so at the same time as he's doing his 'gambling' I've put many bet's on several matches - I then watch some charts and daren't have any beers. Because I'm a 'trader' I use a lot more than a score to try to ensure that the tight margins I'm working with yield me a meaningful profit. If I make a mistake or am wrong I might lose a score - if everything goes right I might get double that or more. If Betfair goes down I might dance around the room and lose substantially more than a score. I occaisionally check a watch list and hear Peter Webb telling me that an event has been suspended.

We're both 'punters' - which one's the mug punter?

[Kafkaesque]

Aside from being mentioned with financial trading, you can kick in 5% often being mentioned in poker circles, although I just as often see 1-5% being bandied about both with poker and betting. Clearly, it's an arbitrary number, as several has already commented, and we'll only ever get closer to a true number if a bookmaker has a (corporate) brain meltdown and releases figures. Which they'll never do because it'll be so low as to hurt their customer acquisition and retention, or in the case of the exhange liquidity (as someone else alluded to).

My take has always been that it's linked to the assumption that it - be it finances, betting, trading or poker - requires being smart, and by extension the steep drop towards the smartest cookies in IQ terms, with only a few percent standing out from the masses of average(-ish) IQ.

Whether smarts is essential or even the most important quality is completely different can of worms, but it's an undeniable advantage in these fields with many different moving parts. Even in a fantasy land, where bookies (and BF exhange) doesn't want to earn money and it's a zero sum game, the starting point would be around 50% being in profit. When the race to get the money in good enough to beat the commssion/juice/rake, some will be smarter than others; some will have better work ethic than others; a select few will have inside information (in sports), and 50% will dwindle fast. Those left will still have to overcome biases galore, mental pitfalls (chasing losses, drunk betting/trading, TV-bias, and just plain emotionally-fueld betting/trading), solid BRM, understanding risk of ruin and preferably stake optimization.

Over a long enough period, like 10+ years, my guess would be that 5% is generous. Very much so, and that the true number is a lot closer to 1%.

[Derek27]

I have a friend who is a 'gambler' - he puts a score on his team just before ko on saturdays (regardless of price) and then watches them play while having a few beers. He might lose his score - he might double it or more. He might sometimes dance around the room watching the slow motion replay of a crucial goal.

I think I'm a 'trader' - so at the same time as he's doing his 'gambling' I've put many bet's on several matches - I then watch some charts and daren't have any beers. Because I'm a 'trader' I use a lot more than a score to try to ensure that the tight margins I'm working with yield me a meaningful profit. If I make a mistake or am wrong I might lose a score - if everything goes right I might get double that or more. If Betfair goes down I might dance around the room and lose substantially more than a score. I occaisionally check a watch list and hear Peter Webb telling me that an event has been suspended.

We're both 'punters' - which one's the mug punter?

I would define a mug punter as someone who's intent on making money but hopelessly inadequate and places under value bets. Punters who don't expect to win or place bets on events they're watching for the excitement of winning money are recreational punters.