The Millionaire Trader's Handbook
Page 11
The Britannica blog defines gambling as "
the staking of
something of value, with the consciousness of risk
and hope of gain, on the outcome of a game, a
contest, or an uncertain event whose result may be
determined by chance or accident or have an
unexpected
result
because
of
the
bettor’s
miscalculation
."
To clarify this, we dug out phrases like
risk and hope of
gain
,
results determined by chances or accident
, and
better miscalculations
.
So how do all these fit into the world of trading?
Here is the deal: trading involves using historical price action
to predict the current price movements based on certain
long-term analyses, either
with technical analysis or
fundamentals.
When trading, we base our analysis on key factors such as
technical analysis, demand and supply zones, fundamental
analysis, Fibonacci rules, etc.
However,
with gambling, we rely on predictions and
justification based on hope without any backed-up data to
support our actions.
All decisions in gambling are based on hope, which is why
the casino always wins over the players.
Do you know why the casino always wins over the players in
the long run? It's because of the odd probability I mentioned
earlier.
The Millionaire Trader's Handbook
Page 12
The odds of a player winning are always lesser than the odds
of the casino winning. The
casino is designed to limit
payouts and increase the odds of more stakes, or else they
would have shut down due to funding a while ago.
The same principles apply to all other forms of gambling, but
with different sets of rules. It's worth noting that gambling
organizations make a lot of money because they change your
perspective towards trading by making you think it's easy to
make a million dollars by staking as low as $100 or $10.
However, this mentality is far from the truth in the trading
world, and it's the wrong way to start.
If you want to make
more than what you put in, you need to understand the
concept of a successful trading career.
The Millionaire Trader's Handbook
Page 13
If the market takes more than you put in, you're gambling.
But you're a profitable trader if you make more than what
you put in.
To differentiate
between trading and gambling, it's not just
about making more than what you put in; several other
factors are behind it.
I'll cover these factors in no time. First and foremost, it all
begins with the mindset.
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