Many people equate trading to gambling. That couldn’t be farther from the truth. In gambling, we are taking our chances that the cards, dice, or a slot machine will work out in our favor. We do not have any control over the situation and we cannot manage the losses if it goes against us. If you lose… that’s it. You lost 100% of the wager.
Trading, on the other hand, is speculation. We are still taking a chance with our capital, but we can minimize the losses through stop loss orders so that we never have 100% of our capital at risk. Additionally, we can place the odds in our favor by using proper analysis techniques like the ones we teach in our Professional Trader Course.
By not doing proper analysis we are truly gambling with our trading capital. Take for instance those who gamble on IPO’s or earnings releases. In the United States, the recent IPO of Facebook was widely anticipated. It opened with… Continue Reading
