How Online Trading and Gambling Look Alike

by Mariam Pagava about a month ago in fact or fiction

With a business-like layout, dependence on chance and luck, as well as a good strategy, gambling and trading are similar in many ways.

How Online Trading and Gambling Look Alike

There are many ways of making money. Among the conventional methods are, of course, finding a full-time job, becoming a freelancer, or making your own business.

Then there are other, somewhat haphazard sources of income, like gambling or online trading. People go to casinos or online trading websites to bet against the establishment, and make a more or less steady flow of cash off of their funds. One could say they resemble a business at some point.

But some might even ask: Are online trading and gambling similar in any way or fashion?

You can often hear the terms “betting” and “game” used in trading. Of course, these words are the main characteristics of casinos, so you might have a reasonable suspicion that these two pretty much look alike.

In this article, we’ll take a look at some areas where online trading and gambling are similar.

Wide access

First, and probably the most obvious similarity, is accessibility. Just like online trading, casinos are open and running for way longer hours than the common businesses. While brick-and-mortar establishments can run for more than 100 hours a week—where other businesses can do a max of 40-50 hours—online casinos like the ones here (Casinos-australia.net) are running all day long, as well as all week long, and all year long!

Online trading platforms are active all the time, as well. They have to account for a worldwide customer base, and the different time zones that they inhabit. The same goes for online casinos. So, in this instance, both of these endeavours are accessible all the time.

One of the implications of such accessibility is the ability to trade and gamble more. One thing that casinos and brokers are trying to accomplish is to make their customers play as often as possible. With longer playing times and more executions, the majority of players (or traders) tend to deteriorate their strategies, and increase the lose-to-win ratio against their interests.

Besides, to entice players to gamble and trade more, casinos and brokers often issue various types of bonuses and gifts that are not that big of expenditure for the establishment, but it certainly yields more playing frequencies and, in theory, more profit to the house.

Resemblance to business

We have mentioned in the introduction that, more often than not, gambling and trading resemble conventional businesses. The reason for that is simple: Just like in any other business, gamblers and traders have to devise a comprehensive plan that can generate a profit flow from their current assets.

Many might believe that these two are overly dependent on luck—which, to be fair, is more or less true—but the profit doesn’t generate itself just out of luck and high playing frequencies. When you set off to make money out of gambling or online trading, you have to make a strategy where the win-to-lose ratio, as well as the size of profits and losses, are well-thought-out.

Win-to-lose ratio

When it comes to risks, the best traders and gamblers are totally aware of what are the odds of winning and losing. When it comes to casinos, they only offer those games that skew the win-to-lose ratio in their favor. On average, these casino games have about a 70 percent probability of loss.

When it comes to most of the gamblers, they don’t really have a comprehensive gaming plan. As a result, this 70 percent probability gets amplified the longer they play, because, after every loss, they become even more eager to play more and offset their losses. Plus, they don’t really plan out their next executions. The same goes for traders, who also choose those trades that offer them higher odds of winning.

Sizes of profits and losses

Besides considering the win-to-lose ratio, you have to make sure that the size of the profit is way higher than the size of the loss. For example, when investing (or gambling) in an asset that has a yielding possibility of 40 percent, while the loss can be 5 percent, it can be very profitable to opt for that execution.

Now, you might not be winning on every single execution. However, the losses will be much smaller than the wins, and the next time you hit the jackpot, it’s going to be well worth your risk.

Yet another important factor to keep in mind is how much are the minimum and the maximum lot sizes. If casinos, or traders, don’t have a designated minimum-maximum bet size, the outcome will go against them: In the case of no minimum bet size, the gamblers’ bets will be too low to make any tangible profit for the establishment. The same goes for traders: If they make a bet of, say, 10 cents, the profit yielded from trade will have no significant importance.

As for the other end of the spectrum, if the bet sizes reach unprecedented heights, there’s a big risk of losing so much money that other successful games will not be able to offset it. It works the same way for casinos, as well as traders.

Final comparison

So, to come back to the initial question: Are online trading and gambling similar? Our answer is: in some ways, yes, and in some ways, no.

Just like online trading, gambling also has a close connection with luck and chance. However, both of these endeavours also require sophisticated playing plans, and a lot of strategising.

Just like in business, you have to have a strategy where your current assets generate steady cash flow in trading and gambling. The money doesn’t pop-up just by itself, out of chance or luck—You have to think about the win-to-lose ratios. The higher the probability of winning, the more you should play—or trade—with that exact game.

In addition to that, you have to account for the size of profits and losses. If the loss is too high compared to the win, then it might not be a good idea to play that game.

Another similarity between gambling and trading is their demand for persistence. In neither of these industries does the money come from one single execution. You have to play consistently and improve your strategy if you want to make something out of your gambling/trading endeavours!

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