Thread: Gambler or Speculator?

Originally Posted by ;

It appears ive confused people by going off on a tangent. Im not debating anything, just rambling about different things regarding trading.

That I originaly posted the extract from TE to make people think a little, and as a talking point.

The posts which you quoted are working on the assumption that FOREX is a speculative market untill a large order comes In from a company and disrupts the speculators. However, couldnt it also be possible that 90 percent of what we see is exactly that, company transactions that needed to be made regardless of what was happening...

The only confusion that I entail is the point of dissecting the Gambler or Speculator question. How is this going to make us better traders?

Yesit may be 90 percent whatever the charts/fundies say. How you'd determine the exact figure I do not understand.

And no, the quotes aren't working on the assumption that it is speculative before a large order comes in. It's indiing to us just what forex really is based from - one currency being exchanged for another and the one of countless ways it could be transacted.

People have already addressed in the ribbon.

Everything in life is a gamble.

You gamble with your own life once you walk outside your front door and cross the street. Chances of being run around are just 1 in a thousand (exact figures I don't understand ), so does this stop you from ever leaving your house?

The only confusion I entail is the point of dissecting the Gambler or Speculator question. How is this going to make us better traders?

I did not dissect anything, I presented the infusion and then left that stage alone. There's a difference between both different types of trader.

Yes, it could be 90 percent whatever the charts/fundies state. How you'd determine the specific figure I do not understand.

It's indiing to us precisely what Foreign Exchange really is predicated on - a currency being traded for the one of millions of ways it can be transacted.

If that is all that the quotes are all saying then there was little desire in posting them here. Im sure most of us recognize that.
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Some folks here make transactions based on the premise that the market prices move in a predictable rythem untill a massive order comes in that sends the price in the contrary direction, IE- A random event that disrupts this rythem. For price moves to become predictable then they would have to be made by speculation.
If price moves are non-speculative in majority then the Intraday tendencies we see are random events all lining up to induce price in thesame management.

Now, the important part is the difference between non-speculative and speculative trading. Most on this forum try to forecast price moves using technical analysis, for eg. Breakouts, These things depend on psycology, attempting to ascertain what traders can do next and trading before they do.

Simply set, Plogy, and so charting bare's no weight in Forex IF it is not a speculative market.

Did anybody follow that above? I am hoping I set across my thoughts clearly. Lol.

There seems to be some confusion about gambling and risk. In life there are risks all of the time: walking accross the road, leaving your garage open, all. I do not consider this gambling. Trading is the same. When you exchange you always take on a risk, even when you profit.

If you gamble, you just take on exactly the very same risks but do not profit from it. That is exactly why Larry Harris says that some traders believe they are speculators but since they lose money and do not recognize that it they're bettors. A pure gambler is a utilitarian trader, meaning his profit is not based upon his performance on the market. Rather the gambler derives enjoyment out of gambling, and so profits from enjoyment even when he loses some money.

Savvy?

Edit: Plogy in trading as regards to technical levels and this is a whole nother issue altogether. I will touch on that at a later moment.

Originally Posted by ;

You gamble with your life once you walk outside your front door and cross the road. Odds of being run over are 1 in a million (exact figures I don't understand

Ha!

You dont know the older woman that drives a beatle who lives on our road, have been on our 3rd now.... And the other two had 9 lives left once we got them.

Leon

Originally Posted by ;

There appears to be some confusion regarding gambling and risk.

In the Oxford dictionary:

Gamble:
1) Play games of chance for money stake
two ) Risk substantially for good gain
3) Risky undertaking

So my analogy from this Risk undertaking by crossing the street, is still in-fact a kind of gambling. According to Mr. Oxford at the least.

That said, I still agree with you and with what Larry is attempting to point out that there are two types of traders.

Someone has already mentioned that it is the pathway to becoming a trader/pro/expert, and I agree to an extent.

You basically start as a gambler (very small to no knowledge), move onto speculation (acquired some knowledge) and then (maybe) achieve trader status (expert/pro).

J Pual Getty


Gambling is taking uncalculated risk, Business is taking calculated risk

Originally Posted by ;

Edit: Plogy in trading as regards to technical levels and such is a whole nother topic entirely. I will touch on that in a later moment.

I sure hope that you do. Would really like to listen to (?) Your thoughts.

To be eligible as'not gambling' you want to have adequate information and the result must at least be appropriate more than 3/4 of the time.
In forex, there are too many influenting variables, eg DJI, Fed that would move the forex markets considerably. People fail to predict the above influenting variables, and yet some claim to be able to predict forex that's really a composite of influenting variables united (cental banks, GDP, interest rates, stocks, opinion, people's spending. . .the list goes )

In all trading'systems', the powerful emphasis on cash management that talks about risk:reward ratios and probabilities, points to betting systems.

Some Info which Birdt posted in another thread....

Speculative Positions Vs. Commercial Transactions In the global foreign exchange market, insecure positions outnumber commercial foreign exchange trades, which arise because of trade or capital flows, with a massive margin, although the exact extent is difficult to quantify. Http://www.investopedia.com/articles...ncy-market.asp Some quotes indie that as much as 95 percent of foreign exchange trades are speculative. IFSL Reseach - Foreign Exchange 2007 Hedge funds as speculators About 70% to 90% of the foreign exchange trades are speculative. http://en.wikipedia.org/wiki/Foreign_exchange_market