There is a misconception prevalent in the financial world recently that trading, especially futures trading, is like gambling and not investing at all. Of course, the key point is that neither a gambler nor a trader can just be a gambler. Learning the "art of trading" can greatly increase the probability of successful trading. But in addition, trading and gambling do have similarities. From a successful career Gamblers can learn some tips that apply to trading.

First, let us identify the similarities and differences between traders and investors. Trading is part of investing. When investors do business, they focus on long-term returns. They select stocks that are significantly undervalued, then wait for those stocks to recover in value and then sit back and buy the same stocks, often without holding on to them for the long term. An investor may buy Microsoft stock and then hold it for three years, but a trader may buy and sell Microsoft stock as many as two or thirty times within three years. In addition, investors usually do not short-sell, but once the price falls, traders will short-sell to profit. If Japan's economy experiences a sharp recession, causing Japan to cancel a large number of wheat orders, traders may take the opportunity to short wheat futures. But when wheat futures are over-shorted, traders may in turn buy wheat futures and wait for a rebound. Investors will never do this. They will take a wait-and-see attitude in the short market, waiting for a low to appear before buying wheat futures, and then holding them for a long time.

Let’s give another example to illustrate the similarities and differences between traders and investors. We imagine two people at a second-hand auction and see some antique furniture that they believe is undervalued. Traders will buy the furniture, renovate it, and sell it after a few weeks at most. Investors will also buy the furniture, but they will never sell it easily.

Now, let’s compare the similarities and differences between trading and gambling. Traders are not like gamblers who lose $10,000 on weekends in Las Vegas, nor do they buy five one-dollar lottery tickets in the hope of winning the jackpot or special prize. Gambling and lottery tickets are two random, recreational activities that require no effort, planning, foresight, or execution ability. Traders are more like professional gamblers who treat gambling as a business. In gambling, the banker always wins, but professional gamblers know how to reverse the situation and put themselves at an advantage. Likewise, traders will look for opportunities in areas that other traders are unaware of or are less familiar with. In the early American South, there were many ways to scale a catfish; just as there were many techniques for winning a bet, there were many different ways to succeed in trading. I know a very successful trader who is very good at calculating rates. When he wanted to try his luck in a casino, the casino owner actually paid him to be transported in a luxury car, plus a luxury suite, a big meal, and VIP ticket for the song and dance show, the purpose is to hope that he will not end up gambling.

Trading and gambling have other similarities. First, both must put their money into an arena filled with uncertainty. Gamblers don't know what the dice will turn out, they don't know how the playing cards will line up, and traders can't predict how prices will move. The difference between trading and gambling may be that trading does not have to face and fight against a pile of physical chips like gambling.

Second, both trading and gambling require efforts to find and calculate the maximum probability of reward. The only sure thing in life is death (and some say taxes); therefore, even if you trade or gamble to a professional level, the best you can do is predict what the outcome of your investment is likely to be.

Third, if a trader or professional gambler wants to succeed, he must learn to manage money and know how to allocate financial resources. A professional gambler will gamble as much money as he is willing to risk; in other words, he puts on the table an amount he believes he can afford to lose. Traders must allocate their personal assets in the following three steps: first, they must decide how much money to put in their personal trading accounts; then, they must decide how much money to invest in a specific market; and finally, they must decide how much money to invest in each transaction. How much risk are you willing to take?