Trading is often brushed off as a high-brow form of betting – more about luck of the draw than any meaningful skill.
It is an understandable perspective.
After all, it is all too rare that you hear a genuine success story about an everyday person who has trained themselves to be a trader and then transformed their fortunes for the better off the back of it.
Instead, you hear far more stories from friends, families, and the media about people who wiped themselves out financially thanks to a few risky trades. These horror stories (and their frequency) are enough to put anyone off trading. It does paint a picture that luck, above all else, matters if you want to become a trader.
Not only this, but the seemingly incomprehensible graphs and financial terms you need to grasp to become a successful trader make it seem like it’s too easy to make a mistake if you aren’t under the supervision of a professional.
However, this is telling only half the story.
Here are three reasons why trading is different from betting:
Trading Is Not a Game of Chance, There Are Real Assets Involved
The underlying reason why many people think trading is a game of chance is that they don’t understand it.
Indeed, the lack of general understanding of trading, finance, and the various asset classes is no coincidence. Until a few years ago, financial trading and investing were the preserve of banks and professional traders. You needed a license to trade most assets, which made it impossible for everyday people to put a foot on the trading ladder.
What’s more, the relative lack of mainstream education surrounding finance has built a smoke screen, making it appear as though trading was incredibly complex. This gave rise to the theory that if you weren’t a trained professional, it was simply a game of chance.
Reality is rather different.
While you do need to be fortunate to time your trades correctly, the same could be said of a footballer who happens to find a gap in the opposition’s defense before scoring a goal, or a business attributing its success to a booming economy.
You must combine skill with consistency to develop a winning trading strategy. Turning up, day after day is half the battle.
By keeping a close eye on asset prices – such as with the terra live price index – you will become far more successful with your trades.
You Can Develop Skills in Trading
Unlike betting, trading requires genuine skill, knowledge, and experience to succeed consistently. While it is true that you could randomly trade an asset at the right time and make yourself a millionaire, the chances of doing this are as likely as winning the lottery.
Thankfully, you can drastically increase the odds of success by learning the basics of trading, studying particular asset classes, and formulating a clear strategy which you stick to regularly.
Trading Allows You to Learn More About the World
Another reason why trading is different from betting is that it allows you to improve your understanding of the economy, various industries and global trends which shape our world.
When it becomes your vested interest to keep track of market trends, politics and sociology, you will inadvertently become an expert in several topics you would have previously known nothing about.