Tuesday, October 30, 2007

The Difference between Trading and Gambling

When trading is compared to gambling, the implication is generally negative: that traders are little more than people who roll dice in hopes of a big payout. There is another side to gambling, however, typified by the card counter. The card counter, dealt a hand, is aware of the odds of winning with those particular cards. The counter also follows which cards have been dealt already, dynamically updating the odds that new, favorable cards will be forthcoming. It is this knowledge of odds--and the ability to update them in real time--that makes card counters so formidable that they are banned in many casinos. - Dr. Brett

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