Sim might be fun to play around with but I wouldn't bother going live with it- looking at the website its just an FX bucket shop who'll take the other side of your order - that, in itself, throws up a whole host of conflicts of interest.
Trading the stockmarket (NO Referrals)
- Thread starter mcast123
- Start date
Sim might be fun to play around with but I wouldn't bother going live with it- looking at the website its just an FX bucket shop who'll take the other side of your order - that, in itself, throws up a whole host of conflicts of interest.
Soldato
- Joined
- 29 Jun 2004
- Posts
- 12,957
I'm 50% up on shares I purchased 4 months ago. 
Soldato
There is a massive difference between trading and gambling, proper traders have rules and discipline and they take profits. When gambling, you have zero idea on the outcome of the next card or number, whereas trading has indicators, there is technical and fundamental analysis that aids in short term and long term trades respectively. A simple way to also put it, can you name any gamblers who make a living off gambling? No you probably can't, but there are a whole lot more traders who make a living off it.
OK aside from a large portion of technical analysis being pseudo scientific bunk (it is popular because it is easy, seems intuitive and allows joe public to be up and trading in a short space of time while knowing nothing about the markets he/she is trading)
Why assume that people who are gambling have zero knowledge of the outcome - sports betters have models and will look for inefficiencies in their market just as people gambling on financial markets do.
Poker is a slightly different analogy but to say they know absolutely zero about the outcome of the next card is ignorant, they know what cards they hold, they can (if a skilled player) often estimate what cards their opponent(s) hold, they (if we're talking holdem) will have community cards (if they see the flop) and can calculate the odds of having the best hand, look at the amount in the pot (estimate the amount they might get into the pot from further rounds of betting/and influence this by their choice of action) and can judge whether it has a +ev expectation.
eh - I can name several - plenty of pro poker players and horse handicappers out there
Soldato
I knew you were going to bring up poker. So one game where people have a strategy, not many others. Yes people do gamble on the markets, however traders aren't gamblers. It's not guesswork like you think it all is.
Soldato
So a few people who play poker and bet on horses, how much of the gambling population is that? There are a whole lot more traders who have earnt a stack load for a living than gamblers and you cannot deny that. If it was gambling then surely there would be none of these successes?
its kind of an irrelevant point - what are you trying to say - a subset of people from a very large population is larger than a subset of people from a much smaller population.....
If we're talking active traders as opposed to buy and hold investors then I doubt there would be much difference in returns from looking at 1000 accounts at random from some online brokerage compared to 1000 online poker accounts or 1000 betfair accounts - you'd still get lots of net losers and a small portion of winners.
I don't think there is much difference between what say Bill Benter or various other HK beting syndicates do and what hedge funds do (use sophisticated models to find inefficiencies in price) - neither do I think there is much difference between what mug punters at a race track do and what mug punters at FX bucket shops/spread betting firms do (and that is to convince themselves they have some form of 'system' then lose money over a period of months/years)
Man of Honour
It's perhaps a more sophisticated method of gambling but you're still staking money on something and 'betting' on the outcome. There may be more indicators than in cards or racing but all we're talking about is varying degrees of the same basic thing.
Your last question isn't quite fair because it doesn't acknowledge that in 'real' gambling there are also such successes so it starts from a flawed premise - there may be more people who have done well with the stockmarkets but that, in itself, doesn't mean that they have not been successful gamblers or that there are not successful gamblers at cards, football pools or racing etc.
Its all semantics really - what we're basically talking about is finding an edge or an event with a +ve expectation and wagering money on it - its the same underlying goal and requires the same skill set whether you want to call it gambling or trading.....
Anyway - few things to ponder:
The mathematician who discovered an edge in blackjack and invented 'card counting' was also one of the first people to implement a pairs trading system in the stockmarket and set up the first statistical arbitrage hedge fund.
A group of physicists who were the among the first to build a portable roulette computer to predict the area of the wheel the ball was likely to land in later set up a company using chaos theory developing forecasting systems for the financial markets - the company is now wholly owned by UBS.
One of the best books on horse racing markets is edited by a very well known Finance Professor.
Probably the only real mathematical book on poker is written by a senior quant from a derivatives trading firm.
Successful gambling/trading requires the same skill set, shares the same principles and for all intents and purposes there is little point trying to draw a distinction between the terms.
Anyway - few things to ponder:
The mathematician who discovered an edge in blackjack and invented 'card counting' was also one of the first people to implement a pairs trading system in the stockmarket and set up the first statistical arbitrage hedge fund.
A group of physicists who were the among the first to build a portable roulette computer to predict the area of the wheel the ball was likely to land in later set up a company using chaos theory developing forecasting systems for the financial markets - the company is now wholly owned by UBS.
One of the best books on horse racing markets is edited by a very well known Finance Professor.
Probably the only real mathematical book on poker is written by a senior quant from a derivatives trading firm.
Successful gambling/trading requires the same skill set, shares the same principles and for all intents and purposes there is little point trying to draw a distinction between the terms.
Soldato
In reality do people genuinely win when gambling on say horses, day-after-day, week-after-week, and make a living by purely 'gambling'?
The same logic simply doesn't apply to having a flutter.
The same logic simply doesn't apply to having a flutter.
Totally agree with everything you're saying. Unfortunately, I think you're fighting a losing battle here. The majority are retail investors and will continue to believe what they believe in now. It's difficult to believe otherwise unless they've experienced otherwise. Time on a trading floor with traders is the only way.
Soldato
If its not gambling it certainly involves probability and opinions or guessing is what I'd call it.
Nobody knows the future or even understands fully what is happening in the economy right now.
Tomorrow we find out what happened yesterday if we're lucky
Nobody knows the future or even understands fully what is happening in the economy right now.
Tomorrow we find out what happened yesterday if we're lucky
erm yes.... seriously go and do some reading on the subject - horse racing markets exhibit many of the same features as financial markets but in a reduced form which is one of the reason they are of interest to say finance professors.
for example the Dr 'Z' betting system which highlighted an inefficiency in place and show bets came from a very well regarded financial mathematician:
http://www.williamtziemba.com/
If you want an example of someone who bets for a living and has made literally millions from horse racing do a google for Bill Benter and or read up on the HK racing syndicates - they basically operate like small hedgefunds/proprietary trading firms.
Associate
- Joined
- 11 Mar 2004
- Posts
- 602
mcast, if you quit your IT job, I'm assuming you make enough from this to compensate. If so, how much do you have to invest to make a good living compared to a permie, or even a contractor?
Soldato
i'm entirely in Lloyds at the moment, bought in last friday at 102p and they're now 107.8p so i'm up a little, I'm thinking the best thing to do is leave them alone for a couple of years, should be 2-3x as much in value by then, then I can sell up and put the money into buying a house or something
Soldato
Harry Findlay
I know people who have made a good living from gambling, however they don't nevesarily do it now as the gambling has paid for the houses, cars, and other businesses they now run.
One stock I'd been watching a while has come pretty good the last few weeks, ticker is GKP. Should have plenty more to go in the long run as well.
lol just checked previous page after writing this and see someone else is on the gkp train Pity I'm only trading for fun and not for real though, sadly no cash to really give it a go. But doing well on my virtual portfolios lol
One stock I'd been watching a while has come pretty good the last few weeks, ticker is GKP. Should have plenty more to go in the long run as well.
lol just checked previous page after writing this and see someone else is on the gkp train
Pity I'm only trading for fun and not for real though, sadly no cash to really give it a go. But doing well on my virtual portfolios lol
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Hey a noobie here. What do you guys think about investing in AMD for the long term. Looking at a long history model, they look very low. From price 40 in 07 to 4 now. Would this be a good investment to leave for a few years? Intel have managed to manage reasonably well due to c2d and i7 and future i5 and i9 anouncments.
Thanks.
Thanks.
Soldato
So let me get this straight, gambling is classed as a legitimate profession these days?
Soldato
It'd be nice, but it's not a requirement.
I was taught by a Chicago Exchange trader, he actually moved away from the floor to become a retail trader because it offers significant flexibility and for the most part the same rules apply.