I have been trading crypto for about a year now.
When I started, I always found myself wondering whether I was gambling. This was because my fundamental knowledge of crypto trading was minimal and my technical analysis was almost zero. This would lead to losses more often than not. When I entered a trade then, I was basically just throwing money away!
I hate to gamble. I’d rather work hard and take a long time to gain something than put my hopes on sheer luck. The disappointment that comes when you don’t win can be heartbreaking. Winning is great. But the easier you get things, the easier it is for you to lose or let them go.
The promise of quick returns for little work could be a dream for many of us. It is very tempting! Society even has a phrase for it. Hitting the jackpot. And it is celebrated in many cultures.
And it can be very lucrative for the lucky ones. But gambling even with its few chances of making it big in a short time has its perils.
Is crypto trading the same as gambling?
Here are some aspects that distinguish crypto trading from gambling. For the purpose of the story, I’ll also include forex trading.
In crypto trading, you set the odds by yourself while in gambling and betting the house has already fixed the odds in most cases.
With proper fundamental and technical analysis, a trader is at liberty to decide how much they will make and when they will make it when crypto trading. In gambling, however, these factors are mainly determined by the house.
Gambling and betting follow a negative binomial distribution, unlike forex and crypto trading. This means that you could keep making profits from trading without incurring losses if you are good at it while your chances of turning profits while gambling are reduced. They are not even 50/50 in most cases.
In betting and gambling, the events are not mutually exclusive. This means that there is a 50% chance and less of either winning or losing.