Friday, January 11

Is Stock Trading gambling?

Infosys came with a good set of earning after 4 quarters of bad earning and  moved up 16% today many traders were left with a surprise to see such a big move.Few traders  called me and said "Bramesh Sir asa move ana ke baad tu mujhe trading and gambling ek jasa hi lagtha hai " (Bramesh sir seeing such move i presume trading is equivalent to gambling only) . So let me give some elaborate explanation to explain this
At a first glance, trading appears to be similar to gambling, As in gambling is very risky, high probability of losing a huge stake and luck plays a major role for a gambler. However, while there are some similarities, there is actually a major difference between these two activities.
Trading and gambling both involve a certain element of luck and skill, as well as probabilities and uncertainties. Both present the opportunity to make huge amounts of money in a short period of time, and vice versa. That is why both pursuits require good money management skills and strong psychology.
However, there is one big difference - the edge. Whether you are trading or gambling depends on whether you have the edge. Simply put, this refers to whether probability is on your side...

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