Trading is gambling, right?

This has got to be the number 1 sentiment believed by the conservative nelly, who believes that you just need to invest into the SP500 and watch your money compound over the years.

While the nelly most likely is correct in their historic comprehension "compounding model" in the SP500, the more important question becomes about what one values.

Time, or Money?

As in, do you value money today in the present context so that you can secure your future or the illusion of money in the future at the expense of it potentially not happening, or you dying in the process of getting there? Are you willing to risk the 'forgotten year' as the markets went through between 2000 and 2010 where you would have made 0% return on your "SP500" compounding model. Are these the sort of things you're willing to risk so that you don't have to "think about" making money? Is it that you value being unconsciously rich, as opposed to consciously rich and competent? Wow, I'm really hitting some deep questions here. These are important questions to wake you the F up. What do you want? Everything has a cost.

Most people don't consciously think about the two, as they always write off the passage of "Time vs Money" as a cliche saying they don't really dive into deeper.

The reality for most is that their fears and their limiting beliefs are what keeps them enslaved to a method of life. Typically a method of life full of quotes like "life isn't fair" and "you have to work hard to make it" and "I can't afford that" and "seniority is king."

So let's dig open the conversation, isn't trading simply gambling? I mean the big billionaires on my local news feed say so. And the majority of people who do it, end up losing. So the sentiment must be right. Right? Not so fast hombre. I'm going to get to this answer in a roundabout way.

My approach towards trading the stock market has evolved in the sense that I view the motions of the market, in a similar light to my views about the activities of life. What do I mean by that? I mean that there are no guarantees in life.

We all know it, we all have seen examples of it, yet we all somehow try to live in a way whereby we want to "control" the outcome of everything, specifically, controlling our "certainties" in life with the amount of money that we either have saved up, or invested into "safe" and "risk-averse" portfolios such as 'fundamentally sound' companies, ETFs, and 'real-estate'. 

While reality has shown us time and time over, that one Financial Crisis, or a Pandemic, or Boeing 737 MAX crisis, can wipe away even the 'soundest' of investment portfolios in a matter of 4 weeks. Why do we then continue lying to ourselves with the illusion of "certainty?" 

Avoiding Pain

Because it's a basic human need. Humans need certainty in life, so they can "plan" and feel that everything will be okay, so they don't get anxious. Read that again, "so they don't anxious." As in what? Humans make decisions to avoid pain. It's the natural fight or flight response in them. What do the market makers in the stock market know very well? How to generate pain, leading to your decisions ending up unprofitable.

In a paradoxical way, humans also needs uncertainty in life. Like who will their loved ones truly be? Will they ever get married? Will they ever have kids? Will they get rich? Will they get their dream career job? These questions keep them hunting and chasing life, and develop a purpose to wake up for.

So DO NOT underestimate the need for both certainty and uncertainty. It's what keeps you alive as a human.

So then we achieve the conclusion, that life as a whole is a gamble. Right? And that the only possible metric and indicator we have going for us, is the repetition of history. In fact, history has repeated so many times which is why the saying goes "history repeats itself."

Like clockwork, when history repeats itself, all the bandwagoners say "but this time it's different." History shows us again, it's no different every time.

So then where does the sentiment that "trading is gambling" come from? It comes from the 90% + of people who try it and end up losing money, and since losing money is no fun, doesn't pay the bills immediately, and is just damn painful, people make the conscious decision to give up and say that trading is a farce and a gamble.

Trading is life, accelerated.

No brother/sister - The reality is that trading, is just life happening in an accelerated fashion. It's likely that if you suck at trading, you probably suck at life. You don't really do much outside of your bubble and comfort zone, and that very jail cell you've surrounded yourself with is why you will never achieve success outside the "rewards" of systems like "seniority" and "systemic promotions" which life offers what I call the "comfortable class."

In the stock market, the market makers know your human nature for fear and greed, and they do a damn good job in manipulating your emotions so that you make decisions out of the exact wrong and counterintuitive headspace. How many times has your stop loss hit, just to see the stock run without you? Countless times. Market Maker's know how to fool you.

On the flip side, Goldman Sachs makes money 90%+ of the time. I don't know about you, but 90% odds of success sounds like a near sure thing that trading is in fact, not gambling. So then why is it that retail always has a skeptical view of it, while the smart money doesn't? 

The sustainable 1% do not make emotional decisions

Smart money does NOT make moves and counter moves based on emotion. They recognize that life as a whole, hell - waking up that morning, is a gift, is a gamble, and there's no guarantee that on the car drive to work, a piano won't fall from 500 feet and crush you to your grave. Right? Morbid, but it simply reinforces the truth that there exist no guarantees. The smart money has figured this out and has decided to live inside that space.

Smart money also pushes the rhetoric that you should desire and "plan" and "safely" make "risk-averse" decisions in life, so that the smart money can continue making money in the playground, where the real money exchanges hands, and makes the rich richer.

It's not that the working class is not able to access this candy land full of money, it's that they aren't systemically conditioned to deal with uncertainty. In fact, they're conditioned to avoid uncertainty, like a plague. So as a result, we, the smart money, give you jobs, pensions, a seniority number, and a meagre salary, so you can go on living an illusion of "certainty" until we pull the money away from you every 10-12 years when the market crashes in one way or another, and we take back the very thing you tried building, for cheaper, and just like that, the smart money gets richer, and the dumb money (retail) gets poorer.

Eventually, this system will collapse and Joker-like mayhem wouldn't be that out of touch with reality, but until such time, this exchange in hands between the poor and the rich will continue. For how long? Who knows. It's a gamble. ;)

Trading is not gambling

So no - trading is not any more gambling than the gamble of waking up or the gamble of not coming home for dinner that day. The reality is that just like life, trading associates 0 guarantees. Those people, who have psychologically awakened to understand this truth, train to be comfortable with uncertainty, and train excessively to manage their risk, and make decisions from logic, succeed. As opposed to the 90% of people who simply make decisions out of emotions, and continue living a life made up of decisions out of fear to deliver what simply feels like "guaranteed" results, to avoid pain.

How then is longevity experienced as a trader? Mastering ones own emotions. Being self-aware about what one's fears are and what one's greeds are. Learning to work within the confines of those psychological goalposts, and recognize that even though you're down in a stock, it's not the end of the world and that recovery out of being down, is historically possible. You just have to start analyzing and thinking about what to do, how to go about it, and what history has shown you in the past, and stop chasing the instant gratification of needing to be right, this moment.

Buying the FEAR on a historic runner.

Take a look at my near 100% return on $OCGN in a matter of few days. Where everyone is panicking, I'm buying (blue triangles). Where everyone is scared of missing out on the upwards price action, I'm getting out (red triangles). This is purely logical. Why? Because where there exists mass agreement, the participants are normally broke. Remember that.

So is trading any more gambling than living your life? No. They're both as uncertain as it gets. The only difference is that if you think you have "certainty" built around your job, career, savings, and mortgage, you get to live a lie within the 'illusions' of certainty, and the stock market simply outs that lie in front of your face, time and time over, in real-time.

Those of us who have made our peace with it, get to be the participants who are profitable as a direct result of not lying to ourselves and instead, get to enjoy the riches both financially and psychologically from mastering comfort with uncertainty - as that's where growth actually stems from. It's from this place the smart money can donate, and make the world a better place for the less fortunate. While educating them to take action for themselves and not living a limited lifestyle.

THIS is what leads someone towards being a financial figurehead, leader, and someone others aspire towards being alike.

Are you the next person to conquer this? I look forward to serving you. Start here.