(Newswire.net — August 6, 2019) — Many people equate trading with gambling, but when it is done right this is the farthest thing from what it is really like. Having said that, some traders do trade like a gambler would gamble, and this is where it starts to go wrong for them. A successful trader will put in the legwork in advance, ensuring that they understand the markets and have a chart that they trust before putting any of their money onto a trade. A gambler won’t do that, and that’s why gamblers lose the majority of the time.
It’s a good idea to determine whether you’re a gambler or a true trader. You might not realise, and if you don’t know you can’t do anything to change your situation and the way you trade. Read on and you’ll soon see how a gambler operates when it comes to their trades; if you recognise yourself, don’t worry – you can change the way you do things and success will follow.
Even though we would advocate attending a live trader programme or enrolling on a structured online trading program the below pointers will help to get you on the right foot.
Spending Too Much Too Quickly
When you are a good trader, you know you should only even trade with what you can afford to lose. Even when you’re entirely sure about a trade, you’ll put smaller amounts down on each one, spreading your risk and ensuring a better return overall rather than throwing everything you have at one trade.
A gambler won’t have done their research, and they’ll be keen to make as much money as possible in return for as little work as possible. Although a nice idea, trading doesn’t work like that – at least at the beginning. Hard work is required to make it work in the right way, after which it becomes much more automatic.
This is why gamblers run out of money so quickly, and why they stop trading so soon after they begin. This is why traders are able to continue trading until they reach a point where they are more confident and happier about what they are doing. In other words, they are giving themselves more of a chance to make money than a gambler ever would.
Profits Are Everything
A gambler wants to make as much money as possible in the shortest amount of time, whereas a good trader will understand that trading is a long game, and that small profits that can gradually rise in value are the much better option.
Traders are traders for the long haul, and gamblers are only gamblers until their luck or money (and often both) run out.
It’s Emotional
Emotions and trading just don’t go well together. Once you start getting over-excited, disappointed, even angry at the way your trades are going, you’ll also start to make mistakes. This is why it is often best to ‘set and forget’ your trades, allowing your charts and stops to do what they are designed for, and ideally coming back to find you have made some profit.
Another word for someone who is emotional – and lets those emotions allow them to make rash decisions – in trading is a gambler. Emotions are what causes mistakes in trading, they are what makes people forget everything they know and trust and ‘punt’ instead. And when this happens too often (or at all) losses occur, and these losses can be catastrophic.
For successful traders, how they feel is less important than getting their trades spot on. Of course, they’ll feel happy when they win and disappointed when they lose, but those emotions will soon be put aside and the trading will continue without having been affected. Gamblers have trouble forgetting how they felt, and will trust a ‘lucky streak’ or keep piling money into trades to make back what they lost, often on nothing more than a whim rather than anything concrete. For more information on the similarities between trading and gambling – click here.