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Know Yourself - Are You A Trader Or A Gambler?


In most novice cases I found that traders do not know that, "Is he trading or gambling? Between trading and gambling, there are huge changes. In this article, we will know a brief description about it.

What is a Trader?
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A trader is an individual who engages in the buying and selling of financial assets in any financial market, either for himself or on behalf of another person or institution. The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer-term time horizon, while traders tend to hold assets for shorter periods of time to capitalize on short-term trends.

Now, we will know how to identify a Trader--
  • Has an effective trading methodology
  • Trades according to plan and never deviates
  • Journals all the trades and review them regularly
  • Always identifies the potential risk and limits it
  • Thinks of profits as a bonus
  • Always remain neutral over a win or a loss
  • Sets no expectation on the outcome of every trade
  • Practices "set-and-forget" trading approach
  • Only trades when his trading edge presents
What is a Gambler?
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Gambling (also known as betting) is the wagering of money or something of value on an event with an uncertain outcome, with the primary intent of winning money or material goods. Gambling thus requires three elements to be present: consideration, risk, and a prize.

Now, how will you identify a gambler--
  • Doesn't have a trading edge
  • Doesn't follow a trading plan
  • Doesn't journal and review past trades
  • Pays little to no attention to risk management
  • Thinks and focuses only on profits
  • Rides the emotional roller coaster while trading
  • Always predicts, guesses and hopes
  • Is addicted to watching the flashing quotes
  • Trades far more frequent than he should
The Bottom Line

However, you have to be in the market as a trader or you can't last long. And if you have a , then it might be easy to increase some capital into your account.

Best of luck!

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