Traders Are Just Gamblers, Right?

This week has been an interesting one because I have had a chance to mingle with people who are not in my line of work, namely the financial markets. Please don’t misunderstand me, I love spending time with my students and fellow instructors and pretty much anyone who enjoys the markets but from time to time it is really refreshing to see things from a different perspective, and that is hard to do when all the people you speak too have similar opinions to you. At the moment, I am taking a few weeks off from teaching classes and spending some quality time at home in London which means that I have had the opportunity to socialize with my British based friends and get myself out and about, which in turn leads me to the inspiration for this particular article.

Earlier this week I was invited to a social/networking event which is run and hosted by a very good friend of mine. It basically involves a regular weekly meeting of various small business owners and entrepreneurs who meet and pass on business opportunities to one another. I like the concept of it very much and my friend thought I could bring something to the table. I was happy to go for the chance to meet people but said that I didn’t feel it would help me in my own business because, as a trader, I don’t need clients, marketing and services, etc. This is obviously one of the things I love about trading as it’s just you and the market and there is always a job to go to as such! However, I was keen to see if there were people who I could work with in areas of my career so I went with an open mind.

As expected the event ran smoothly with everyone getting a chance to briefly introduce themselves to the others and give their “pitch” of what they do. This took about an hour and was followed by the open networking session afterwards. Unexpectedly, this is where my day got interesting. You see, when I stood up and said that I was a trader and that I wasn’t looking for business as such but was happy to speak to people who may like to talk about what it involves, I didn’t realize that I would shortly after become the most popular person in the room. When the formal session was over I was literally swamped with people forming a line to speak to me as they were all intrigued by what being a trader is all about. Most people have an idea but this normally comes from what is read in the press, see on TV, in the movies or in fiction, and that’s what came across clearly at this event. Firstly, the expected questions come out like, “Are you rich?,” “How much money do you make?,” and “Do you feel like it is a real job?” With a smile on my face I happily answered these questions by telling people that trading is about making short term income and building long term wealth on your terms, not somebody else’s. I may be rich in comparison to one person but seen as poor to another. Like everything in life, it is all relative. The great thing about the markets today is that you can get involved at pretty much any financial level. The more money you have to invest the more you can potentially make, sure, but there is also more that you can lose too. The best question was the one about it being like a real job which is what I wanted to answer in a little more detail.

I addressed the woman who asked me this question to see if she could elaborate on it a little more. She replied by saying that she felt that trading and investing is simply gambling and not like a real profession. Some people would maybe get a little offended by this but I have thicker skin than that. I asked her firstly what she did for living. She told me that she had her own clothing boutique in a prestigious local town. I said to her “Great! You have your own business like me and you are also a gambler too!” This got a laugh from the room from pretty much everyone except the lady herself. She responded by saying that her business was not a gamble and that she had a plan when she set it up, regular clients and a good name in the area. My response was that I agreed and like her, I too have a business plan, regular setups which have been tested and solid risk management skills, so how are we different, really?

Free WorkshopAt this, she took her time to respond and simply said, “OK, so I agree that you treat it like a business but your line of business is still guesswork.” With this, I quickly asked if she could guarantee sales and that her clients would always buy from her? Every time she advertised, did she know how much return it would give her? Did she know with complete confidence that her business would still be around in 10 years? She looked at me and said, “We can’t guarantee anything in life but we can follow a proven plan that has shown to work over a long period of time.” With this I smiled and said “See, we aren’t any different at all!” If you treat your trading and investing like you would any other business in the world, you have a genuine chance of success. It is as simple as that. Not all businesses work and not all of them fail. The difference is always in the details and what you actually do, not what you think.

Do people regard Casinos as a poor business model? In fact, most people out there would love to own a casino! They can be hugely profitable if run the right way, like a business and with the odds for success stacked in their favor. So why does trading and investing have to be any different? It doesn’t, and all we must do is follow the rules, treat it like a business, and have an edge. So what is the edge I hear you ask? Join me in 2 weeks to find out more.
Take care and be well,

Learn to Trade Now