Is Trading A Business Or A Gambler’s Playground?

Business Hand Shake

This article is by our guest contributor and trader Goncalo Botelho.

When I usually mention to people I’m a trader, it doesn’t take long until they throw out the word “play” somewhere into the conversation and it hits me every single time. This notion that trading is somehow a casino game brings a lot of misconceptions about the activity itself.

Trading is a business, much like any other and it is crucial that you have a well thought plan, to be able to achieve success.

For those who like to refer to trading as gambling, we can compare trading to the most common decisions people take in our society, and by doing that we can clearly see that trading isn’t the biggest “gamble” they could be taking.

Take for instance, the average working man taking up a mortgage to pay his house, when the future of his job/company is unknown and workers within the company are being laid off. Or take the example of the graduate university student who took a loan of about 30k or more for his education, only to find himself having a job behind the counter of an average retail shop earning the minimum wage.

In that view, we can generalise and say that every decision you make in life is a “gamble” in the same way you are considering trading to be. Even the eggs you buy at the store pose a risk to your health if they are infected with salmonella, yet you always ignore that risk and end up buying the eggs in what could become the largest gamble of your life.

Trading is more a matter of risk management rather than gambling.

If you’re looking to be successful at trading then you need to take trading seriously, like a business. And this will require your effort to invest in what matters.

Invest in:

  1. Education: The web has lots of resources regarding trading from the very basics to the advanced levels of mastery. Attend webinars and look for good minded experienced traders who are willing to mentor you on your way up. There is nothing better than anyone who has been in your shoes to provide you with some guidance and prevent you from making classic mistakes.
  2. Observation: An active observer does not necessarily have less experience than the ones acting. You can learn a lot just by actively focusing and observing the markets.
  3. Practice: There is something known as the “10,000 hour rule”, which is essentially a theory which claims that success can be achievable through repeating the same activity over a period of 10,000 hours. This can be obviously relative depending on your background and education. But the point of this rule is that you can achieve success by forcing yourself to focus and gather the experience you’ll need in order to thrive in whatever you’re doing.  You can’t win until you lose.
  4. Developing a System: Once you feel comfortable with what you’ve learned, develop a system that will work out for you in order to meet your demands. There is no point for a busy doctor to have a short-term scalping system. Develop a system that matches you and your lifestyle. By that time you’ll gain a greater appreciation for trading and hopefully, you’ll know what you’re doing.
  5. Planning: Always plan ahead before setting a trade. Know what your limits are and what to expect. Remember to manage your funds accordingly to match the risk of that particular trade and look to the big picture because after all, you’re a trader, so don’t get too attached to a single view. Markets change all the time, and so will your opinions to match the markets. The more scenarios you’re aware of, the better prepared you will be to trade them.

You can connect with Goncalo Botelho on Facebook.
Goncalo Botelho


  1. Very interesting article. Neatly written and a good food for thought.

  2. Glad to hear your saying it’s OK to just observe. I’m taking longer than I would like to fit the learning in before I start, but I know that the discipline of holding back until I do have a few strategies that I am clear about and confident with enough to put them into practise may be no bad thing.
    You’re right everything is a gamble in life. This theory of gambling traders may be true for some out there, but there are good and bad in every industry (Hell, look at Harold Shipman!) Carry on regardless…
    This was sound advice for starters. Looking forward to my first trade, (albeit still slightly nervously still right now).

  3. Solid, practical advice for those of us who are serious about trading as a 2nd source of income to supplement main earnings. I disagree with your rationale of buying potentially contaminated eggs as assuming taking a gamble with life. Take it from a microbiologist – hygiene control measures put in place by manufacturers/public health protection agencies + the likelihood an egg may contain Salmonella is extremely low (1 : 20,000 eggs) due to its’ natural, in-built barriers to bacteria. In addition, eggs cooked adequately minimise risk of bacterial infection.
    Not wanting to espouse on this further due to it’s irrelevancy but you do have a large following. I completely agree trading should be envisaged as a business, rather than gambling. Thank you for the timely article.

  4. It’s sad that much of rational thinking most of us get, comes from outside the school system. Thanks for the article. Rather than convince the uninformed verbally, it is best to send them this post.

  5. Came across this again today, not sure where I picked it up from,(possibly TradingPub) but it is based on a book by T. Harv Eker ‘Think Rich to Get Rich’ :
    “Don’t Lose Your Money” Declaration
    Place your hand on your heart and say…

    “I will demo trade until I develop a solid, profitable system before I trade with real money.”

    Now touch your head with your index finger and say…
    “I am a smart and patient forex trader!”

    (Some gurus advise not using a demo account; I suspect the wiser ones advise:
    Do NOT open a live trading account until you are CONSISTENTLY trading PROFITABLY on a demo account.

    In terms of T Harv Eker, I am not exagerrating when I say that this man has helped to change my life. He made me recognise a poverty mindset I had, that would inevitably have sabotaged any efforts I was making to turn my life around and to consistently make money and – most importantly – keep it. This is crucial in the Forex ‘game’ too! I recommend this book highly to anyone who keeps losing despite best efforts. He gives you practical exercises for you to work on:

  6. Hello Dee,

    I personally never came across the book you’re talking about but I recognize that the attitude/mindset whilst trading will greatly influence the results.

    As for the observation, yes it is indeed a good complementary thing to do since that you’ll be taking mental notes of what is happening. Imagine someone that truly focus his attention on the markets consistently, due to repetition this person will eventually be able to spot great patterns with the naked eye. This will aid in the trade execution process.

    About the demo account, I advise everyone wanting to get started to explore a demo platform to get familiarized with trading on a very basic level. Personally, I’ve learned the hard way and had multiple losses before I understood what I was doing. Luckily for you, you have mentors like Alessio and Kevin who are here to help/mentor you on your way up through his material and webinars.

    I hope you’re doing greatly well,


  7. I don’t mean for this to sound negative but have to get this off my chest. As an amateur trader I’ve learned that it takes a lot of time and losses before getting into the game with even some success, and even then I’m only in about 2-3 times per year when the market is healthy. I’m not proclaiming to be an expert by any means, but what I have seen over the last few years personally is stock trading is just rationalized legalized gambling. At least that’s how I feel when I’m in the game. If one could make a “good” living at they would be able to retire comfortably and wealthy, and young, I’ve met none so far, though I’m sure they are out there. Most make their living off of book sales and fee based web sites. I still enjoy this site and appreciate what you are doing here. Just wanted to toss in my two cents for new people out there. Thanks.

  8. Hey there

    Don’t pretend you’re consistently profitable. That is just a lie. All those who provide others with educational trading services like webinars, workshop, books, live trading rooms are in fact big losers when it comes to trading real money, and pretending that they are successful is a very necessary component for their business as trading mentors.

    To verify this statement is accurate and true, just go ahead and review some lawsuits that have been filled against trading mentors over the past 10 years.
    Investing can be profitable but not trading.


  9. @Mark I happen to disagree with your generalization. I had a website where I shared my very good charts, my live trades and account statistics, free for everybody to see. But then I decided to stop supplying my trading ideas when I came across a website selling a subscription for my very own charts. Since then the only people I mentor are some close friends and family. On a closing note I’d say that trading can be profitable, but gambling on the other end is not. Thanks for your comment.

  10. I think it’s all right what you say.
    But gambling is a part of the business, just as you said is part of life.
    Trading is a huge ,dynamic and liquid market where your might be someone’s else losses
    You are in constant competition with million of people, even if you think you work by stick for your plan by yourself , the market is constantly moving by decisions made by millions of people.
    So just like a poker player, you have to read the minds of people who will react to the minute by minute economical news, the annual or quarterly financial reports and so on…
    By trading, specially day trading, you are constantly betting on reactions of the market (other people). I think in many ways traders are similar to poker players. Yes, you live on that by betting. You need to control your emotion. You need to put your life at stake every time. You need to remain cold by realizing a loss and start again with the next trade.
    Besides your points, Alessio, I would add that a psicological preparation is important ,specially for day traders.
    You can make money in your paper account and fail to do so in your real money account , just because when you put your real money, your real life at stake, you might not have the same guts to risk as in a paper account, even if you have the right move.

  11. trading IS gambling. plain and simple. you cannot compare trading to buying eggs!! LOL – in trading you are taking hard earned money and putting it under serious RISK. over 90% lose. the odds are you WILL LOSE that money. you may actually have better odds in the casino as it cannot be manipulated as much as the markets can

  12. Goncalo Botelho

    @David Professionals vs Gamblers – If you have £1M and set a 1000£ trade (leverage 50:1) in any forex instrument, in what way is that risky to your account? Now if you tell me “I trade with £1M and set a £1M trades using leverage 400:1” – Well there I agree with you that you’re gambling. You see, the odds of burning a M1£ account with a 1000£ using leverage 50:1 in any forex pair are less than 1:20000 (eggs probability taking the figures pointed out by Veronica), now if you trade £1M by placing a £1M trade using leverage 400:1, then it will be very likely that you’ll join up the ranks of the losers as this trade has a extreme probability and potential for loss/blowing an account. So knowing this, the best thing for you to do is to find the right amount for your trades by assessing various possible scenarios that can develop in the instrument you wish to trade.

  13. @David – have you ever entered a single trade based on technicals. I too used to think a lot like you earlier till i found a mentor who showed me how to trade using technical analysis. I have completed 1 year in trading. Made profits as well as losses. but my trading capital is intact. Only after putting in multiple trades did i understand how this works and you are your weakest and strongest link.

    Goncalo has put in good thoughts on trading which is a general opinion among all people irrespective of which place in the world you are in and good way to start.

    Maximiliano has added a good pointers and the psychologinal preparation is very important.

    though the technicals give you direction, always use stop losses coz as a individual trader we are up against big sharks who can move direction with their kind of trade.

    Plan your trades, hold on to winning positions (even after 1 year of trading this seems difficult), place stop losses, analyse everyday and place trades.

Comments are closed