Is Trading Stocks, FX, and Other Financials Addictive?

Addictive behaviors usually have a predetermined pay-out. Trading doesn’t. The trades are determined by the fundamental value of the stock, currency or crypto instead of an obliging house that has already decided whether your bet will win or lose. If anything, traders use math and statistical tools to determine what is likely to yield the best outcome; at least they try their best to do so. Traders don’t just play hunches like gamblers who flip coins with all odds against them and wait for luck to take its course before cashing out their bets.

If Trading Is Not Guessing Then What Is It? 

What separates trading from riskier behaviors – which some people become addicted to – is the use of math, statistical tools and common sense to make money. In the absence of any formal education on the subject you can learn a lot about how to trade off-the-cuff just by following simple risk management tips and learning as much as you can about fundamental values before trading any asset class. Risky trading on the other hand is more of an art than a science, which makes it easier to get into but harder to master.

The subject of whether trading stocks, FX and crypto is or isn’t gambling has been debated time and again. Is it so hard for anyone to see the difference between the two? Is it human nature to be so entrenched in their own beliefs that they refuse to change them even when confronted with overwhelming evidence that contradicts them? Is this what makes gambling so dangerous for people who can’t seem to separate it from trading completely or do they just not want to see the truth about how investing works and why it’s not a form of gambling?

Some people view trading as a sort of game. Is this really the case? Is there something about trading that makes it fun, even exhilarating if done right? Is that what keeps so many traders involved in it despite the risks and dangers attached to it even when they’re not aware of how real those risks are? Is it safe to assume that most people who trade stocks, FX and crypto do so because they have an innate desire to win as opposed to those who gamble with all the odds stacked against them? Is gambling just a game of chance while trading really is a form of investing instead of flushing your money down the toilet for no good reason?

The honest answer to these questions is that there’s no simple straight forward yes or no response to either question. Trading is a game like chess, while gambling on the other hand is more like playing Russian roulette. Is trading as dangerous as Russian roulette? Is it also based purely on chance? Is trading done for the sake of making money and not to relieve one’s boredom? Is it possible to understand how the process of trading works in order to make the most out of it? Is understanding how it works enough or is early preparation and extensive education a key part of the trading process?

Is there just as much risk involved in gambling as there is in trading when done without any kind of formal education or any real knowledge of how it works compared to what is required to master the game? Is using common sense and essential risk management tools enough to protect traders from themselves when trading stocks, FX and crypto or should more be done on a governmental level in order to mitigate the inherent risks that are attached to trading as opposed to gambling alone?

Is it the nature of the game that attracts so many traders or is it just how easy it is to get sucked into the excitement factor that makes trading sound like a lot more fun than taking part in gambling?

Is it possible to win by applying scientific methods to trading as opposed to gambling on pure chance every time even though both are seemingly done for the same reasons? Is trading the same as buying stocks and bonds with the sole intention of making a profit? Is it possible to make a profit by investing in things like stocks, crypto, forex or CFDs instead of outright gambling on their performance over time compared to simply betting against them for short term gains regardless of the outcome whether it’s positive or negative?

Is it human nature or an addiction to the thrill of winning that prevents most traders from seeing the differences between trading and gambling and what makes trading not a form of gambling despite the many similarities they share as far as the way they work goes? Is it possible to be a winner by comparing the inherent risks involved in both types of ventures before attempting to make a profit either way and then making sure you have adequate protection regardless of the risks you’re exposed to?

Is it possible for traders who play the game correctly to win as opposed to those who aren’t aware of how trading really works when done right compared to gambling on pure chance? Is using stops based on chart signals and/or technical analysis to lock in your profits and/or limit your losses enough to keep trading from being just as dangerous, if not more so than gambling or should the government implement taxation on trading activity to offset some of the inherent risks associated with it? Is it a necessary evil that most traders who fail do so because they have no idea how to go about doing things without taking a major loss in the process? Is trading that much different from gambling when done correctly? Is doing both at the same time not twice as bad compared to either one on its own and why? Is it possible for professional traders to virtually eliminate risks involved by using proper money management techniques along with other strategies that have been proven to work overtime such as trading indicators, chart formations and candlestick patterns? Is the idea of using stop losses when trading stocks, forex or crypto unrealistic in comparison to gambling where you can’t lose more than the initial amount you bet on each throw of the dice for example no matter what happens?