What Casinos Can Teach Us About Stock Market Trading - Mike Swanson (09/13/2017)
I got a harrowing - but must watch - video for you about gambling addicts and there is a lot to learn from it.
And it applies to the financial markets.
When you put in a trade in the financial markets the odds are on the other side of the order is a market maker, trading robot, professional, or a gambling addict.
No one wants to talk about the gambling addicts that are in the financial markets, but it's reality and it's important to understand.
Watch this video to see the mind of an addict at work:
Some takeaways here:
1)The guy stops gambling at the end of the video. In a lot of ways life is about learning and winning by learning from your mistakes and moving on so he is a winner at the end of the video. At this point the only way he will never gamble again totally is if he moves far away from the casinos (but then there is the trap of lotto tickets) or attends the gamblers anonymous meetings. It's likely he is doing the latter.
2)Listen to him talk when he was gambling like he is trapped in a fantasy that he is about to win big when everyone knows the slot odds are rigged against him. Yet he keeps chasing his losses to keep the fantasy going until he hits "rock bottom."
3)When he was gambling he never recognized that the odds were really stacked against him. In the stock market world of short-term traders most people rarely consider what the odds really are in the type of trading they are doing or even try to figure them out.
Investing for the long run with a solid money management strategy in stocks paying dividends, in good sectors, and at good valuations is one thing, but inside the options market is where there are more gamblers than anywhere else in the financial markets and they do what this guy was doing in the video by doing highly risky big potential pay-off long shot bets that almost never pay out over and over again. They are low probability traders chasing a dream and turn the financial markets into a casino for themselves.
Now I used to go to casinos a lot and gamble and actually win more than I lost, but then I started to lose and lost interest in it all.
What I was doing was playing poker in tournaments and cash games when poker was huge over a decade ago during the poker boom.
Back then I could win.
Today I really can't.
There is a poker saying that if you sit at the table and don't know who the sucker is than you are the sucker.
Well back during the poker boom there were a lot of suckers, because poker was new to people and many wanted to get in on it.
You had online poker sites drawing new players into the action.
Every time I would go to a casino and sit at a poker table there would be someone drunk there and losing and someone totally new whose hands would shake when he bet and sometimes there would be someone literally throwing their money away in madness.
BTW - if you are into poker you can find my name listed in the Herndon Database for poker tournaments.
What happened is that over time these types of people disappeared. I guess they just lost their money and were done as the novelty wore off for them. And when the Feds cracked down on online poker they drained away the water the fish needed to swim in.
So I started to lose and finally I realized that the game had changed. I saw that the bad players were all gone and I had no edge over those that were now left at the tables. And so I left the game too.
But the gambling addicts have not stopped.
Today we have a boom in online fantasy sports betting instead of online poker.
And inside the stock market what attracts the gamblers more than anything is the lure of options buying where they make mad bets over and over again spinning their wheels in options that always end up expiring worthless for them.
They treat the stock market like a slot machine and a trade like it is a lottery ticket.
And many of them can't stop.
People like this has always been a big segment of the trades going on in the options market.
That has always been the way the options market is and always will be.
Yes binary options are designed to fleece people totally, but even simple call and put option buying almost never works as almost all options expire totally worthless.
Now the options gamblers do provide liquidity for those that want to hedge their positions and for people like me who want to act like the house and sell bet tickets to them.
Tonight I'm going to eat a juicy steak with money I made out of thin air playing bookie to an options gambler.
And once the options expire I will put out an Options Trading report and sell another one to make more money.
You need to get this next alert to get involved with this type of trading with me.
Just go here:
These trades cost me very little to do.
There is almost zero upfront investment and once you learn how to do it and start to get my reports to do them you'll see how easy they can be.
It's a simple concept.
If you are going to play the financial markets you need to know who else is playing against you and use a strategy designed to work against them.
So if you want to compete against a computer program you better have a better program.
But if you want to trade against real people you can almost pick who you are trading against by the strategy that you use.
Those casinos are not built by people going to them and winning, but by people going to them and giving them their money by playing a game in which the odds are rigged against them.
The casinos make the odds.
We can do whatever we want to in the options market.
We can go in there and buy options like lottery tickets or we can sell lottery tickets to crazed gamblers.
They are going to buy them from someone.
It might as well be us.
So start by clicking here.
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