Hey it’s Clay Trader. Obviously I am not at the chalkboard right now. This video I want to get a little interactive so we’re outside in my front yard. Also excuse the attire. When you trade from home, when you’re your own boss and there’s no dress code or anything like that you can wear whatever you want. To be honest, usually I wear less than this but I don’t want to get the cops called on me.
So I figured, hey, I better put on some clothes. Today’s topic is just answering a question in what I think is a very basic way. But you see it all the time: is stock trading gambling?
People say “wait a second, you hold on to a stock “for just a few minutes and then you sell? “Wait you’re telling me you’re looking to buy a stock “and sell it two hours later? “Wait you only hold a stock for one week? “No, you’re supposed to put money in a 401k.
“You’re supposed to put it in an IRA “and then you just let the next 30 years go by. “I’ll hand off that trading stuff. “It’s very speculative.
“It’s all gambling, no control over it. “It’s just very risky.” The thing is that most people don’t realize is we are all trained; we all learn how to trade as children. In fact it’s probably one of the first things we learn how to do. You’re maybe thinking “how is this possible? “What are you talking about?
“I just got started with trading.” Well trading and the reason it is not gambling is because you can gain an edge. Think about it, when you go and cross the street, there’s a couple different things you could do.
The first time, this is my driveway, this isn’t the street. But I’m gonna just, so put on your imagination cap. I’m about to cross the street.
Watch carefully; what do I do here? Alright, now let’s try another time. Now what do I do when I cross the street?
So what was the difference there? The difference is the thing we learned as children. Look both ways before you cross the street. But why are we taught that?
Why are we taught to look both ways before we cross the street? Because it’s a rule that gives us an edge. An edge over what? An edge over getting killed or getting severely harmed.
That’s all trading is. Trading has strategies; it has rules. If you follow the rules you get an edge and you are not guaranteed to not lose money, but you can tilt things in your favor. Just like if I looked both ways, I’m still not guaranteed to not get hit by a car.
I could trip on the ground and fall and then get hit. Or something crazy could happen. There’s no such thing as a guarantee. However, I vastly improve my odds of not getting hit by a car by just looking both ways. That is how trading works too.
There are rules; there are strategies. Now granted you have to teach yourself just like you have to learn to look both ways. You have to learn to apply rules.
You have to learn what these rules are. But once you learn them, it can be applied and you gain an edge. Gaining an edge is what it’s all about for me.
My looking both ways in the stock market is through technical analysis and charts. That’s what I teach. That’s what makes sense in my mind.
Whether or not you want to use charts or maybe another means, that’s up to you. The point being is you have to have rules. Lot of people come back and say “well you look at the stats. “Only 10% of people that trade actually “succeed and make money,” or whatever the current stats are. First off, 10% that still shows that it can be done.
But how can it be done? It can be done with rules. There’s professional poker players. How do people that play pokers, the same ones, always get deep into the tournament? Because poker is all about rules and gaining an edge. All those poker players have rules in their heads.
They’re following different things except it’s not trading, it’s poker. It’s not crossing the street, it’s poker. The same for stock trading.
You can gain an edge and it’s not your fault, it’s not my fault that 90% of the people decide, “hey, I don’t want to look both ways “before I cross the street. “I’m just gonna get hit by a car.” Most people who trade stocks do get hit by a car because they don’t have rules or they don’t follow the rules or they just never bothered to even learn. They don’t want to invest in to education. They don’t want to invest to learn the rules of how to look both ways. Is stock trading gambling?
Yes, for most people it is. Why? Because they don’t look both ways before they cross the street.
However, learn rules, learn strategies. Invest in to your education. Look both ways and it becomes a much safer thing to do. I hope all that makes sense.
Just remember before you’re about to enter into a trade, ask yourself “am I looking both ways?” And you’re saying “not really, I’m just kind of randomly buying.” Then, you know what, that’s a good sign that you don’t have any rules in place.
You don’t have a strategy in place. That is the first and foremost thing and step in the direction that you want to take. If you enjoyed this video I want you to do a couple things. First just click the like button down below if you’re watching this on YouTube. Little things like that go a long way.
If you’re watching this on my website then leave a comment below. Like I said take a few seconds and little things like that go a long way. It shows that you’re interested and finding these videos helpful.
I’ll keep making them as long as that’s the case. So click the like button or leave a comment. Also subscribe to my YouTube channel. That’ll keep you up-to-date on these quick tip videos, my live-trade videos and then just general chart-analysis videos that I’m doing. That way you can keep up-to-date with all that is going on around here. So thank you again for watching.
Remember look both ways before you cross the street and trade without emotion. (whipping and flipping of words)