Trading – Are You Gambling Away Your Money?

Investing as defined by is “In general terms, use of money in the hope of making more money.” Gambling, on the other hand is associated with “taking a chance” rather than “taking calculated risks” or strategizing on how to generate an income.

There is a very thin line dividing these two actions from one another. Ask yourself – are you investing, or are you gambling? How can you tell?

Fortunately, there are ways to tell whether what you are doing with your money is investing or pure and simple gambling. Here are a few points that can spell it out for you.


Peer Pressure Trading

Sometimes, people find themselves in the midst of a social circle which speaks of nothing else but trading to generate handsome incomes. So what happens?

You too would like to be a part of that inner circle; you want to belong! So what do you do? You plunge into trading without actually understanding what it is, its principles, or its risks. This is essentially gambling.


Excitement Trading

Have you noticed the feeling before the end of a big game? There is a gripping tight feeling of excitement that escalates into euphoria if your team wins, or plunges you into despair if your team loses.

Some people are drawn into trading specifically for the rollercoaster ride of excitement that this method offers. They’re not driven by the need to generate wealth from the money invested into this technique. What they want is the feeling of excitement that builds from within when they anticipate a win or loss.

If this is what motivates you, be aware that you’re actually gambling.


“I Have To Win” Trading

There are people who simply have to win all the time. They don’t find it easy to cut their losses when the stock market is on the decline. They would rather risk it all in the hope that the market rights itself and the money put in – which is about to be lost – will be recovered.

The “I have to win” attitude is one of the most common traits of a gambler. An investor pays close attention to the market trends and strategically backs out, cutting his/her losses to a minimum. If you feel that you cannot back out anytime during trading because you have to win it all, you are gambling.


What Investment means?

As you can see, it’s easy to think you’re investing when you’re actually gambling, as the distinction is very close between the two. The major traits of investing when compared to gambling, are:

  • Risks are carefully calculated; no investment is ever made randomly, or without careful checking of the market
  • Trading is a serious job and not an adventure; anything else, is gambling.
  • There’s no compulsion to win. Trading is a means of careful investment, which generates wealth, but could occasionally result in losses.

Now ask yourself again… Are you investing or gambling?



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