Gambling and investing in the market is often assumed as the same thing due to many reasons. The most common reason is that both require investing money on the outcome and taking chances on something which is in progress. While gambling can be related to betting in casino games or sports, when it comes to trading, gambling becomes a much more complex version of itself. The beginners who have no clue about the market while investing are gambling.
How is gambling a part of trades?
Inarguably every person has gambling tendencies of some level. Some like to make bets for a dare while others push themselves in the compulsion of playing casino games. Even if they do not want to admit it, there is a gambling impulse in everyone that makes them take risks in their choices from time to time. It is when we discover the motives behind our actions, we will be able to change the way we look at gambling. When one gets indulged in trading, it is the tendency of gambling that makes them put their money on the trades without proper research. If the trade becomes successful, it becomes a part of investing, and the person will naturally become a professional market participant.
Many times it happens that people get involved in trading due to social pressure. Some people may not have an interest in trading or investing, but due to everyone around them talking about trading, they invest anyway. They may invest in showing respect to the trading group or when they do not want to feel left out in the talks. There are several variables in the market, and any misinformation among investors can create a gambling scenario.
Other factors that push gambling influence
There is a learning curve in gambling that any investor will have to go through if they do not want to gamble on their trades to expect lucky profits. This also depends on how the person approaches the financial markets. How one person approaches, the market will be determined based on a successful trader. There are two traits of traders that determine the gambling tendencies in traders.
Trade gambling for excitement
It is common in the beginners in trading to listen to their heart and emotions while trading. Losing a trade can easily provoke them to make poor decisions for themselves. It also creates a topic of discussion in social proofing about the loss in trades of the entire group. For a person who is making trades to be in the social circle, it is easy to tell that they are trading in a gambling style.
Trading to win
The other type of traders uses a methodical and systematic way to make investments. They want to win the trades at all costs and do thorough research about the stocks or currencies before investing. Good traders always take their losses as a sport and analyse further to make better decisions in future. But not having to enough wins and a series of bad decisions ending up in losses confirm that the trader has entered the method of gambling.