Difference between "trading" and "gambling"

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Derek27
Posts: 166
Joined: Wed Aug 30, 2017 11:44 am

Thu Oct 12, 2017 4:54 am

I'm not sure if Euler was agreeing with the quote or just quoting, but if you back a 3/1 winner, if your aim was just to back a winner, then it is pure luck.

If your aim is to get 30% winners on all your 3/1 bets thereby making a 20% ROI, which is more like what serious gamblers are aiming for, then you need a bigger sample to determine if the aim as been achieve. If the aim has been achieve or if the gambler has made a profit over a decent period of time, nobody can argue that it's luck.

Whichever twit tweeted that quote obviously doesn't understand gambling and believes it's about nothing more than backing winners. Mind you, about 98% of the population probably doesn't understand gambling.

stueytrader
Posts: 172
Joined: Tue Dec 15, 2015 6:47 pm

Thu Oct 12, 2017 12:07 pm

Have to agree that it is wrong to classify all 'gambling' as purely based on 'luck'.

Equally, not all of a trader's results will be down to their 'skill' - some of it will also be due to luck.

max_usted
Posts: 83
Joined: Tue Feb 14, 2017 6:07 pm

Thu Oct 12, 2017 1:21 pm

Perhaps it's a question of "refinement" - as in distillation and sophistication.

Many people seem to consider speculating to be a rather indulgent and morally hazardous activity (addiction, effect on families and wider society, etc).

We distinguish between people who enjoy the morally hazardous practice of alcohol consumption in terms of our perception of their degree of sophistication (including their self-control and the effect that their practice has on wider society) - so that a middle-class drinker can be a "fine-wine lover," and their enjoyment of alcohol can be considered a mark of their refinement/status, whereas a park vagrant is a "wine-o" or an "alcoholic" (pejorative). And this is a meaningful and worthwhile hierarchy, given the wider social effect of the two classes of behaviour.

So i'd maybe make the same distinction between people who "trade" in a controlled and ultimately profitable manner on the one hand, and a gambler who punts their family fortune on NZ to win the World Cup at the beginning of the tournament, or on wild accumulators etc, on the other.

So traders of any kind, speculators, investors, gamblers or all doing roughly the same activity, and we use different words to distinguish them on the basis of our perception of their refinement? So not an exact science at all (in technical terms), more a question of consensus on what should be the social status of an activity, with "gambling" a more pejorative term to describe wilder behaviour, and trading referring to something more disciplined/refined in a rather general sense.

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MemphisFlash
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Location: Leicester

Fri Oct 13, 2017 4:00 pm

this is what a gambler will do
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Derek27
Posts: 166
Joined: Wed Aug 30, 2017 11:44 am

Fri Oct 13, 2017 5:41 pm

Can't remember what tournament it was, but England was once as low as 5/2 with one bookie. A news reporter who new nothing about betting was getting all excited about it, even though they were 11/2 with other bookies.

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ruthlessimon
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Fri Oct 13, 2017 5:56 pm

MemphisFlash wrote:
Fri Oct 13, 2017 4:00 pm
this is what a gambler will do
Ha, yeah!

In fact just looking at the winner odds on Betfair, Uruguay 50/1!?! Lol easily half the team get in the England 1st 11. Muslera, Godin, Gimenez, Cavani (maybe), Suarez. I'm even tempted to trade that, should be at least somewhere close to England's odds.

Kafkaesque
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Fri Oct 13, 2017 7:18 pm

ruthlessimon wrote:
Fri Oct 13, 2017 5:56 pm

Ha, yeah!

In fact just looking at the winner odds on Betfair, Uruguay 50/1!?! Lol easily half the team get in the England 1st 11. Muslera, Godin, Gimenez, Cavani (maybe), Suarez. I'm even tempted to trade that, should be at least somewhere close to England's odds.
Generally, I'd tend to agree with your observation. The big difference is that the drop-off in quality between the best and second best for most positions is steeper for Uruguay. Enough for that kind of price difference? Probably not. But it makes it a risky position as a trade. An injury to Suarez and you'll likely have to sell it a very big loss. Less likely for that long-term an injury now, I know, but also less movement in the market now.

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ruthlessimon
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Fri Oct 13, 2017 8:34 pm

That's a fair point, yes I agree with that. Also waiting on a year for a trade isn't probably the best use of capital!

stueytrader
Posts: 172
Joined: Tue Dec 15, 2015 6:47 pm

Sat Oct 14, 2017 6:01 pm

Are we maybe rather guilty of using quite a 'straw-man' view of gambling here, perchance...? ;)

Yes, punters 'slapping money' on selections like idiots are of course very different from traders who are well controlled. But what about the well-disciplined, highly stake controlled, bankrolled, analytical to the hilt, type of 'gamblers'...surely they are a much closer breed to a trader...?

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ShaunWhite
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Fri Oct 20, 2017 7:32 pm

Gambling = zero income tax
Trading = taxable at standard rates.

I know we can technically avoid income tax and NI, but all other 'buy it low, sell it high' trading activity from investment management to the local fishmonger attracts cgt, corp tax or income tax.

I won't be too sorry if the HMRC continue to call what we do 'gambling'.

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