Are You A Trader Or Gambler?

Do you trade?

Or do you gamble?

People often claim that trading is akin to gambling. There is validity to this statement…depending on how you define the term Gambler.

Most psychological research agrees that, in general, there are 4 types of Gamblers.

1) The Social Gambler which is someone who occasionally has a punt on something with friends. Their bet sizes are limited, with the main focus being socialising rather than gambling.

2) The Problem Gambler is when the social aspect becomes less important. The person continues to gamble even when the act of gambling has a negative experience.

3) The Pathological Gambler takes things a step further again. They are over confident and get excited by risk. Gambling takes up an immense amount of their time, often to the sacrifice of friends and family. They brag about their wins yet don’t talk about their losses. They increase bet sizes attempting to recover losses faster.

Many of these characteristics are found in some traders. And especially true of novice traders. Whilst they may have plenty of capital, they lack discipline and a formal risk management strategy.

There is however a fourth category.

The Professional Gambler.

For the Professional Gambler, the act of betting money is planned. It’s based on a system or strategy aligned to methodical principles tested and proven to provide them with an EDGE.

They have a high level of discipline. Impulsive decision making is nonexistent. They understand that losing is part of the game. They don’t chase losses. And never up the ante to try and make up for those losses.

A professional gambler tends to have characteristics similar to a successful trader. Yet here’s the catch…

Professional Gamblers can easily revert into Problem or Pathological Gamblers.

It’s a very fine line we all walk when it comes to the discipline needed to become a successful trader. The team at The Chartist are here to help keep you on track, and maintain that winning edge.