Quote from: tread93 on Today at 01:07:21 AM

I think the think that gets most people is that they don't realize there is such a large overlap when it comes to trading and gambling. The gambling portion in trading is the risking of the gambling and in gambling it really is all risky as well and so they are just so similar in that sense

I think there is some sense when someone says that trading and gambling are the same when someone is defining an action (mistakes) of a newbie trader but when one is talking about a professional traders performance^[1], then that is where it separates trading from gambling. We can see the key differences on trading risk and gambling risk in this artcle titled Gambling vs Trading: Key Differences and Risks Compared.

On the surface, the risk between these two looks the same but looking at the technicalities and key differences by digging deeper we can see that although both have risk they are very different. The key differences according to the article is that trading is built on knowledge, analysis, and strategy while gambling is primarily driven by chance. However according to the article they similarities are:

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Risk of loss: Both occupations include the risk of losing money. Losses in gambling may accrue fast owing to the high stakes nature of betting. Market volatility, if not handled effectively, may result in catastrophic financial downturns.
Decision making: In both cases, humans must make choices in the face of ambiguity. Whether it’s picking which bet to put or which stock to trade, there is always some element of uncertainty.
Emotional impact: Both may elicit intense feelings such as excitement, terror, and even happiness after a victory. Emotional highs and lows are prevalent in both areas, which is why regulating psychology is critical.

The key difference are as follows:

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Control Over Outcomes
One of the most important distinctions is the degree of control each activity provides. Gambling results are virtually completely determined by chance and unpredictability. Individuals may, on the other hand, exercise some influence over trading by using analysis and technique. Traders may utilize historical data, technical indicators, and market patterns to estimate future outcomes and change their trading strategies appropriately.

Learning and Adaptability
Gambling does not provide the same opportunities for learning and skill development. Gambling success is seldom associated with the capacity to evaluate or adjust. However, trading is a talent that develops with practice. As traders learn from their triumphs and mistakes, they may improve their methods and make better judgments in the future.

Risk Management Strategy
Good trading depends much on risk management. Designed to protect traders from catastrophic losses are stop-loss orders, position size, and portfolio diversification. Since gambling seldom has such policies in place, it is naturally dangerous. A professional trader is different from a casual gambler in that they can properly control risk.

Not because some traders do the trading in a gambling way like:

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Lack of strategy: Making deals without a solid strategy or depending simply on intuition.
Overtrading: Taking unnecessary risks in the goal of making a rapid profit rather than following a systematic method.
Ignoring risk management: Failing to establish stop-loss orders or risking too much funds on a single deal.
Following the crowd: Making judgments based on market hype or the acts of others, rather than doing own study.

This does not necessarily means that trading is the same as gambling since it was the mistakes of newbies that makes trading like gambling and it does not represent the actual trading activities of those who are knowledgeable enough to trade.