The Stock Market is Not Gambling
The stock market is not gambling
There are many people who claim that trading in the market is a form of gambling Victory996.
They believe that it is because the outcome of each trade is uncertain and that the
odds are against you. The truth is that investing in the stock market is not gambling
and you can be very profitable if you follow a proven trading strategy.
The fact is that trading in the stock market is very different from gambling and there
are several differences that make it a far more profitable activity than putting
money in a casino https://www.victory6666.com/my/en-us/.
Investing in the stock market means buying shares of companies. These companies
have a market value that fluctuates over time and they can also pay dividends to
their shareholders. Moreover, investors can hold their stock for a long period of time
and if they sell the shares, they can still earn a profit from their investment.
This is because the company competes to innovate their products and services
which leads to a higher price for its stock. Eventually, this price will converge with
the net present value of its future earnings.
In comparison, gambling involves a random outcome that has a negative expected
value. There are a few ways to avoid this, but if you don’t follow a proven trading
strategy, you may find yourself in an unwinnable situation.
It is possible for traders to develop gambling tendencies without knowing it and
these behaviors can affect their overall performance in the market. Fortunately,
there are some tell-tale signs that you can use to determine if your trading behavior
is more closely aligned with gambling than investing.
1. Traders who enter into trades because they are excited about an asset in-the-
moment and do not have a trading system will most likely be gambling rather than
trading.
2. Those who trade because they want to fit in with others will be more likely to be
gamblers than traders.
3. Those who trade because they want to bet on a certain event or because they
think it will happen often will also be more likely to be gambling than traders.
4. Those who trade because they want to feel the adrenaline rush that comes with
winning a bet will most likely be addicted to gambling rather than trading.
5. Those who gamble are addicted to the dopamine rush that comes from financial
success, which blows out any rational content in their minds and totally blows out
any observable performance that they may have on a chart.
6. Those who gamble have no discipline and don’t control their risk, which results in
losses.
7. Those who gamble have a survival bias that makes them want to lock in profits
and increase their bets to make up for previous losses.
This can lead to a situation where the gambling trader blows out their entire trading
account. Unlike in the casino, where they can try to get back their lost money,
trading is a much more serious matter and has no timeframe. The trader has to
tame the survival bias of their brain and stop playing the game of chance that the
casino offers.