Trading is NOT gambling

Trading is NOT gambling

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by 5paisa Research Team Last Updated: Mar 30, 2022, 12:24 PM IST

Most people have the will to win. However, few have the will to prepare to win. – Bob Knight

Trading in the stock markets is not like a dice game, while gambling is a zero-sum game of playing the available odds. Trading involves examining past information and analyzing available data to trade or invest in stocks. Unlike gambling, trading has no ultimate win or loss. Companies compete with others to innovate their products and provide better services, thus leading their stock prices to rise. This, in turn, leads the stockholders of that firm to earn greater profits. Hence, trading is not gambling.

Traders constantly seek the latest information to know the right stocks to invest in. Trading requires technical analysis and application of mathematical calculations to predict market trends. Rationality and reason are a prerequisite for Stock Trading. Investors judge past trades and then plan out their strategy, i.e. where to invest, how much to buy, and how much to spend. Every trade in the stock market is carefully analyzed before buying. A trader should know when to exit from the market well in advance. The best traders not only plan their entry into the market but also have their exit strategies in place before initiating a trade.

Therefore, a trader should form a trading strategy and follow it with discipline. Considering the fact that the market is unpredictable, a wise investor always goes forward with a plan rather than playing with the odds. It is with discipline and patience that they make it to great profits. Put simply, trading is not like winning a one-time jackpot but is rather a steady source of income.

Consequently, traders should understand that he cannot win every trade he/she makes. A long-term profit approach is always more successful for trading in stocks. One should gather information about the companies and gain as much knowledge as they can before they invest in it. Buying stocks without studying companies is like betting at poker without looking at your cards. Market trends are not a closed-space event like gambling as outside events affect the stock market’s movement.

The get-rich-quick perspective which comes with gambling is not suitable for the share markets. Traders should focus on looking for a plan that provides a learning experience and eventually leads to success. Even losses incurred in the markets lead to experience, which can be used to gain better profits in the future.

In conclusion, stock trading ought to be seen as one’s business. You can always look at trading websites and online trading platforms in case you’re stuck somewhere. Remember, as long as a trader seeks knowledge about the stock market, and does not get disheartened by initial losses, he will make his way through. 

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SENSEX
54,135.96
1,343.73 (2.55%)
Nifty 50
16,200.15
390.75 (2.47%)
Nifty Bank
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906.65 (2.72%)

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