Difference between "trading" and "gambling"

[annuity]

It's all gambling at the end of the day. Weather you make money long term comes down to your skill level on your chosen angle(s), be that straight betting or trading.

Say you only pick a horse/team/whatever to back or lay because you like or don't like the name you're going to lose long term. If you back or lay every favourite in every race 5 minutes from post time and close at the off you'll lose long term.

It's all about developing the revelant skill(s) that apply to what you're trying to achieve to enable you to consistantly win more than you lose.

Easier said than done of course.

[annuity]

As other's have mentioned the difference is mainly in the perception others will have of you if you tell them you're a gambler as opposed to a trader, but at the end of the day sod em. As long as you pay your way in your life and don't scounge, your real friends and family won't care less.

[Derek27]

I can easily imagine a scenario where two highly successful gamblers have a completely different view of a race; one thinks the favourite has a 6/4 chance, the other thinks it's not worth backing at 5/2 and is more interested in a longer shot. One of them may be right and the other wrong in this particular race, but they could both be right for the majority of races and continue to be successful.

But in your example, if fair value is 11/8 & price touches 6/4 - gambler 1 is desperate to get his back filled. I'd imagine gambler 2 would be the one filling his back orders, considering he's unhappy backing @ 5/2. I think this is why the SP is so accurate. The bad traders are killed off.. well their banks are killed off - just like natural selection (an argument in favour of PC). Lets say in your example price currently trades @ 6/4. Gambler 1 is happy executing at this price & will get filled as much as he can. Whereas gambler 2 disagrees & thinks this is an extremely good lay price. The two battle it out & price their knowledge into the market. If trader 1 is correct with his analysis & others agree 6/4 is cheap, he will move the market back to fair value. Gambler 2 now has a huge loss, his knowledge was incorrect - & the market takes his money - & he is removed from the game.

In my example, it doesn't make any difference what fair value is. It's a question of what gambler's think a good bet is. You need to bear in mind that 'fair value' is a matter of opinion, both, before and after a race. It's not like we're rolling dice where we know what the probabilities are. The fact that the Betfair graph looks like a heart beating is proof that nobody can or will ever agree on what fair value is.

Gambler 1 won't be desperate to get his back bet filled and certainly won't get as much as he can filled. He will simply say, I want £500 on at 2.5, no more, no less. If it all gets matched, great. If it doesn't, it doesn't; I don't want 11/8 because that's poor value, or not the profit margin that I desire. I don't want £1000 on at 6/4 because even though it's good value it's disproportionate to my capital.

Gambler 2 would not be interested in laying at 2.5 because he's a gambler and not a trader! He's interested in another horse in the race, if anything.

If a gambler has £1000 on a horse at 3/1, he needs it to win 30% of the time to make a 20% profit on turnover. Whether it's one of the 30% that win or the 70% of losers, he could't care any less whether a trader takes it and trades it at 4.5. He can make an overall profit and so can the trader.

It may be the trader that lays it at 4.5 and then greens at 4.2 that loses. Then again, it could be a gambler who backed it at 4.5 and the horse wins, in which case it would be the layers who laid it at 4.0 and let the bet run that lost, but not the ones that laid it at 4 and traded at 4.5!

Traders win and lose in individual markets but gamblers do not, because the aim is to achieve a percentage of winners.

[ShaunWhite]

I'm going to try and put this topic to bed once and for all.

It's not a logical comparison because Gambler and Trader belong to different taxonomic ranks. (mic drop)

It's like asking 'What's the difference between a fox and a mammal?'. All traders are gamblers but not all gamblers are traders.

Eg.
Order: Gamblers
Family : Traders
Genus : Sports traders
Species : In-play horse trader, golf trader, generalist.

Or
Order : Gamblers
Family : Investors
Genus : Business investors
Species : Theatrical angels

Or
Order : Gamblers
Family : Actuaries
Genus : Commercial risk
Species : Public liability insurers

The word 'gambler' should be avoided for the sake of clarity, not for fear of ridicule or intellectual snobbery.

[Derek27]

The difference between traders and gamblers is the difference between human beings and animals.

Traders are gamblers just like humans are part of the animal kingdom and therefore scientifically animals, but in a different context, humans use toilet paper and eat with a knife and fork, whereas animals stick their face in their food and clean their arses with their own tongues.

In the context of this forum, I would define a gambler as someone who places bets with the intention of letting them run and a trader who places bets with the intention of greening or reducing the liability in some way.

[ShaunWhite]

The difference between traders and gamblers is the difference between human beings and animals.

Traders are gamblers just like humans are part of the animal kingdom and therefore scientifically animals, but in a different context, humans use toilet paper and eat with a knife and fork, whereas animals stick their face in their food and clean their arses with their own tongues.

In the context of this forum, I would define a gambler as someone who places bets with the intention of letting them run and a trader who places bets with the intention of greening or reducing the liability in some way.

I gamble on short term price movements, Oink oink!

[Derek27]

It's not a logical comparison because Gambler and Trader belong to different taxonomic ranks.

It's like asking 'What's the difference between a fox and a mammal?'. All traders are gamblers but not all gamblers are traders.

It's not a case of comparison but distinction - there is a difference between a fox and a mammal !

My last post was slightly tongue-in-cheek (I've noticed you edited your post since), but the fact that the subject has been raised so many times means that we have to make a distinction between the two.

Most users of this forum are traders but some may be gamblers, or both.

If you want to avoid using the word 'gambler', what do we call them ?

[Dublin_Flyer]

If you want to avoid using the word 'gambler', what do we call them ?

Non-exiting traders

[ShaunWhite]

If you want to avoid using the word 'gambler', what do we call them ?

'Punters', but I don't want to avoid it per se, I just think it's too vague to be meaningful because it applies equally to 'punters' and traders, and traders usually avoid it like the plague because they think it sounds low rent.

Let's face it Derek, all of us here already know what we mean by a trader and a 'gambler' and Joe Public won't try and understand it anyway.

One thing I do notice though is that the more sucessful people are, the more likely they are to down play their job and visa versa. The boy in the phoneshop will call himself an 'executives sales associate' and Philip Green will call himeself a 'shopkeeper'. Right now, in public, I'm a trader but looking forward to the day I can honestly say 'i'm just a humble gambler' and let the Lambourgini say the rest.

Bottom line is that punters know they'll win x or lose y on a race and traders know it'll be somewhere inbetween, that's really the only difference.

[Derek27]

I suppose that is a good distinction, but as long as we all know what we're talking about, that's all that really matters.

I don't know about you SW, but I've only been on the forum all night because trading on Mountaineer Park was quite lousy tonight.

[stueytrader]

I think there is sometimes a danger that 'traders' forget they have a lot in common with 'gamblers' - assuming you have no risk ('I'm not gambling' etc) is a dangerous path to take. It's fine, it's only a 'trade' I'm placing...can soon become, 'so what if I'm overstaking...' etc

As an aside, I remember reading some time ago that all the biggest one-off losses (single market losses) on Betfair were mostly from traders (not gamblers). Has to make you think, when making comparisons.

There will be some low stakes, highly well controlled and disciplined gamblers out there that would make many traders look downright reckless.

[Dallas]

As an aside, I remember reading some time ago that all the biggest one-off losses (single market losses) on Betfair were mostly from traders (not gamblers). Has to make you think, when making comparisons.

It wouldn't surprise me if most if not all those losses when due to an API failure their end preventing trading from closing

[stueytrader]

As an aside, I remember reading some time ago that all the biggest one-off losses (single market losses) on Betfair were mostly from traders (not gamblers). Has to make you think, when making comparisons.

It wouldn't surprise me if most if not all those losses when due to an API failure their end preventing trading from closing

That is an element of the 'gamble' when placing a trade too, yep. Reminds me, I do need to check on other options for closing my trades.

[Derek27]

As an aside, I remember reading some time ago that all the biggest one-off losses (single market losses) on Betfair were mostly from traders (not gamblers). Has to make you think, when making comparisons.

It wouldn't surprise me if most if not all those losses when due to an API failure their end preventing trading from closing

Slightly of subject, I keep an account of all my inadvertent profits and losses due to Betfair failure and I'm £150 up.

It's pot luck, but if you have more green positions than red over a period of time, you're more likely to be up than down.

[Euler]

When I've watch gamblers, like Harry Findlay, for example, and they bet to win. There doesn't seem to be much detail or logic behind it. Whereas traders tend to work to a detailed brief and expectancy. You know where you are going wrong.

Of course, not all traders are pure traders and some are gamblers calling themselves traders.