What’s the difference in a trader and a gambler?

As a trader I often look at all other forms of trading, betting and gambling to see what and if there are any new or unique concepts that have developed or are developing. Mostly people reinvent the wheel and resell systems to gamblers. I’ve noticed this phenomenon over the years as a trader repeat itself continually.

Gamblers will always buy the new system that will make you a £1000 a week because they have gambled all their previous funds and are hoping to find a new silver lining. But on the other hand some people that say they are traders are actually gamblers, they just don’t know it! Some traders rely on luck and hope and even worse are in the business for recreational value… A trader decides on a trade and has an entry and exit plan, the gambler places a bet and luck provides a result occasionally or maybe even regularly but bad money management soon reinvests the gamblers winnings into other people’s pockets. The professional trader reinvests their profits wisely to make bigger profits in the future that go back into their own pockets.

Some gamblers do make money though and lots of it, but they act like traders. They look after their banks like real investors and have money management in place; they find value and trust their own judgement. They understand losing streaks but know in the long run they will profit. Just like traders they don’t rely on hope.

If you open a trade without a plan that suits you you’re gambling; if you fully understand yourself, your stress threshold, your ability, your self-discipline, understand risk and reward, have good money management and the ability to exit a losing position you’re a trader. If you prefer to place a trade and hope because all of the above sounds like too much hard work you’re probably a gambler. So which are you?

 

Trading the DJI using my System

Trading the Dow using my system since the beginning of 2013 to date could have made you a cool 3000 points + in profits in just over a year, Amazing returns… even using small stakes of say .50p could have netted you a tidy sum. Vince thinks it may reach an all time high by the month end so lets see???

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Just goes to show, using a good trend trading system, free charts and a small bank, big profits can still be made in financial spread betting.

A system I forgot about

This is so simple… Vince mentioned this at his seminar and I totally forgot about it. If you haven’t heard of it before I assure you it’s a real no brainer; but it’s a good way to get involved in trading without risking anything if you are just learning the ropes or if you’re seasoned you may like to add it to your strategies.  Dogs of the Dow has seen some amazing gains in recent years 40% + some years! You can start anytime although they say last trading day of the year but if you read through the FAQ’s you’ll understand more

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Just you wait

Nowadays there is more and more accurate and up-to-date information available to anyone on anything it seems. I wanted to find selfdisciplinea list of top performing ETFs so done a quick search and bingo! Funny enough it was on one of Vince’s website posts. But a quick glance at the readily available graph, free chart and run through your system rules and you are in a trade. But that’s all too easy and the fact it is so quick sort of adds the rookie traders’ expectations that the returns should be just as quick! But as we know this is far from the truth.

Thinking to myself the other day I wondered how to get over to new traders that the hardest part about trading is waiting!!! But when the actual process for making a trade and potential riches is so quick and easy it’s hard to acknowledge that you may have some serious wait ahead if you are trend trading.

It’s best not to kid yourself that you’re disciplined enough if you deep down think it’s going to be an issue; so I thought of how you might be able to practice trading discipline or indeed just discipline in general.

Have you ever started a diet but eaten too much of this, that and the other and found out at your weekly way-in that you haven’t lost a single ounce? Have you ever been waiting for a delivery from Amazon and as soon as it’s arrived you’ve ripped the packaging open to get at your new book/game whatever? Maybe you bought a lotto ticket and you have to know if you’ve won as the balls are popping out the machine?

If that sounds like you it may be worth practicing some self-inflicted discipline in as many areas as possible. Don’t open your amazon delivery until the weekend, don’t check your lotto ticket until Sunday, don’t text your new boyfriend/girlfriend until the evening; don’t have that Ben and Jerry’s until the end of the month. It’s this constant approach to discipline that will really help you in the long run.