Difference between a Gambler & a Professional Gambler

Mr. A & Mr. B are two good friends. They both started as gamblers having some working knowledge on gambling & they bet on Cricket Matches. ( here assuming that Gambling on Cricket is legal :wink: ) They both have Rs 2 lakh as Gambling Capital & both have the same technique to gamble i.e. they bet on Indian Cricket team. They both come to know that India’s gonna play a series of 10 matches. So they decide to go for it.
Gambling criteria is, place a bet for Rs 1. If India wins you get Rs 2, If India loses you lose that Rs 1.
Mr. A is so excited for betting. He enjoys dreaming about how India wins every match & he doubles his money on every bet. Although he is cautious about losing hence decide to place Rs 1 lakh in his first bet.
Mr. B on the other hand studies behaviour of Indian cricket team & finds out that India has a record of winning consecutively & when starts to lose, it continuously loses. Based on this study he decides to place Rs 20 k on every bet.
Next day series starts, both place their bets. Result is ‘India lost’. Mr. A loses all Rs 1 lakh while Mr. B loses Rs 20 k. Hard to believe for Mr. A that India has lost & he is now more eager to recover loss on next trade only. While Mr. B is calm as he has already created plan for his gambling based on studies that he did on India.
Next Match. Mr. A bets all remaining Rs 1 lakh with the strong hope of India wins & he recovers his lost capital, While Mr. B being indifferent about results, bets Rs 20k.
Result ‘India Lost’.
Now Mr. A has nothing to bet. Out of shear frustration he approaches one of his friend to ask for Rs 2 lakh as loan. By the way he is confident now that India is going to win third match as it has already lost 2 matches. ( ab to india har hi nahi sakti…!! :stuck_out_tongue: ) His plan is to bet all Rs 2 lakh on third match, make it Rs 4 lakh, give back 2 lakh to his friend & recover his lost capital of Rs 2 lakh. While Mr B is still gonna follow his plan.
Third match. Result ‘India lost’.
This time Mr. A is completely shattered. He is left nothing but a loan of Rs. 2 lakh & he decides to quit this gambling profession as he believes now that ‘Gambling is vey bad profession’, people only lose money here. Whomsoever he meets, he keeps blaming about gambling & discourages others not to participate in it. 'You will lose all your savings…!!" he frightens others. He is now doing a 9 to 5 job as he has to repay a loan to his friend.
But on the other hand, Mr. B is still in the game. After losing third bet he is still left with Rs 1.4 lakh, enough to place fourth bet. :slightly_smiling_face:
India loses next three matches consecutively. Every time he placed 20 k & lost them. Still he survived & left with Rs 80 k to place another bet. He still behaves in his plan that he made after studying Indian cricket team behaviour.
He places his 7th bet on 7th match & India wins this time. He receives Rs 40 k as reward. India wins all remaining three matches consecutively & he receives Rs 40 k for every bet he placed of Rs 20 k.
So even after losing Total of Rs 1.20 lakh on seven bets he survived & on next four winning bets he made 1.60 lakh. Overall he made 40 k in this series which is 20 % of his total gambling capital. He is happy & waiting for next series.

Case study : Both Mr. A & Mr. B had decent capital. Both had a system to bet. Only difference was both had a different Mind set. Mr. A wanted to double his capital on every bet & get rich quickly. He had very poor money management. His subconscious mind was not accepting that India might lose & he had developed ‘a false hope’ that India would surely win next match.
While Mr. B just wanted to survive & let his system work for him. He never worried about outcome of match. He knew that if he kept betting, odds would work in his favor & he would come out with reasonable profit over time. He followed his money/risk management & placed every bet. That’s it. He never dreamed for high returns & was happy with realistic return of 20%.

Hope you find it useful… :slightly_smiling_face:

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Money management is necessary for sure but how you can say Mr b will make 2 rs profit in india winning matches…
how ?
Its not a right platform to discuss this topic but as you had subjected its worth discussing i guess…

It was a criteria set by the gambling house that they would give Rs 2 , If gamblers risk Rs 1 on bet. It’s an assumption here ( I don’t know about real gambling house’ criteria :slightly_smiling_face:).

Well thats not the case.

As its not legal its not worth discussing also on this platform😊

You can relate it with trading…it’s kind of similar to trading. Afterall Trading is almost like gambling…LOL :wink:

if you say gamble then ok …

we like this profession only then

and all sector has gamble if we really use gamble word

@systemtrader Appreciate your courage to come into a forum full of Traders and call their Trade “Trading is almost like gambling”. (99.99% members are into trading and only 0.01% i.e “me” a small investor).

I cant say it here because I will be lynched but I agree with your statement…

Disclaimer: Said in a lighter note, no offence to anyone. Each one to themselves and fully believe in Live and Let Live.

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Thanks Neha☺
Opinions differ…but as far as I understand those who actively and seriously trade, know that shear nature of trading is like gambling…
Every trade that I take is a chance which would either work or not…all I can do is have a proper trade plan which includes managing my risk and money so that I take chance after chance to let law of large number works in my favour…

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Great post. And i agree that all the things that apply to gambling also apply to trading. Whether they both are same or not is a matter of semantics and hardly matters. What matters is that similar concepts like bet size, position sizing etc are the present in both. And also that it is very hard to get the role of “house” in gambling. Very few people can open a casino. But anyone with 1-2 lakh can assume the role of the casino owner by selling options.

Let me add some more…
Why most traders don’t actually love to accept trading as gambling because they take a lot of real efforts in studying almost every indicator, chart patterns, different instruments, different segments, technical analysis…
After studying a lot of things they begin to feel like they deserve to be profitable now as they have taken so much hardwork…
They relate it with something like studing hard to clear exam and now they deserve a better post with better earning…
But unfortunately even knowing all there is very less chance that they become good trader…
But yes they can become good teacher or technical analyst or work for some brokarage firms…

so,studying indicators etc wont make a good trader then what makes a good trader?

Managing risk, believing in you and your trade plan and handling drawdowns… :relaxed:
Well studing indicator is not bad if it is going to be a part of your trade plan…

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bro,as simple all are important for successful trader…

without practice all books r useless and all books r useles if no practice

as simple

Haha…I agree😊

what isn’t gambling?

We take a chance with education, hoping to get a job some day.
We join an employment, hoping to get promotion some day.
We start a business and incure all the capex. The bet is huge over here. Nobody says only less than 5 percent of the startups work.
We get married, hoping we will have a beautiful family.
We retire, hoping that we can now enjoy.
We die in search of eternal peace.

Our whole life is a gamble

In my opinion when somebody is using their knowledge to gain some advantage its not gambling. Trading is just like business. If you consider it as gambling, how is long term investing isn’t? There also you use your strategies and knowledge to buy and sell. Just that the time horizon in case of investment is higher. You have some strategies to out do the others. Different people use different strategies. Some click, some don’t.
I consider only speculation as gambling because its just a random guess.

Having said all that, I am a long term investor believing more in fundamental analysis. But we shouldn’t undermine the efforts of a trader and call it a mere gamble.

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Almost same thing I mentioned here Jason :slightly_smiling_face:

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Some thought came in mind… :slightly_smiling_face:
Suppose I drink, my friends call me ‘Bewada’ (Drunkard). When I hear this word Bewada, I get angry on them. But it’s the FACT that I drink.
So whenever I sit to drink, I start thinking about that word and get uncomfortable, feel bad.
so even when I am drinking, I am not really enjoying the process of drinking.
But the day I stop caring about what people call me and just focus on drinking, I actually start to enjoy it, isn’t…??

This happen with Traders as well. When they start trading, people call them, 'you are gambling and you will lose all your money…" Traders get uncomfortable thinking," how is this gambling…? I worked hard so much, learned every patterns, indicators. Now I will prove others that this isn’t gambling…"

so when he takes actual trade, he is not comfortable because all he wants is profit. He wants to be right in every trade, that’s how he’s gonna prove others that he is not a gambler…He is so burdened that he never enjoys the process of trading.

If we consider trading as gambling, first think that happens is we stop creating biases like need to be right, need to be perfect, need to prove something…
second, as trading is risky like gambling, we take all measures to reduce those risks,
last one when we consider trading as a game of chances, we love and accept losses equally as we love and accept profits :slightly_smiling_face:

Luck tends to favour the prepared mind. Know the odds, place the bet, manage the bet size and stay persistent and patient. It helps if one has objective data to analyse the odds over a long period of time under diverse market conditions.

Gambling as it is equally applicable to any of our life choices including trading the market may be it’s better to look at all those choices from a risk - reward perspective.

I did not understand what exactly you are trying to say here. DNA and Karma and what not. I have no idea why are we talking about spiritual things too.

Anyways. All that I wanted to convey was its the way we look at things. You can consider anything as gamble and you can consider anything as not gamble.

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