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Is trading the same as gambling?
There is a lifelong debate about which is better between trading and betting. While some people regard trading as gambling, others claim otherwise. However, we believe that you will agree that there are some similarities between the two, irrespective of your take. And also some differences as they are not the same.
So, what are the similarities and differences between the Betfair trading you do and regular sports betting in your bookies? Before we begin any form of comparison, let us understand what we refer to as sports betting and day trading. Shall we?
What is Sports Betting?
Sports betting involves predicting outcomes and placing them as wagers on different sports. If your prediction is correct, you win; if not, you lose. Sports betting covers a wide range of sports, and you can bet on almost any sport around the world. The most popular sports among punters include football, basketball, horse racing, cricket, and many more.
Wagering on sports is common because it is not a capital-intensive venture. You don't need to have robust money to start betting. And with your little capital, you have the probability of winning big.
What is Trading?
In trading, you predict the future direction of an asset; then, you place your money on that probability. If the asset moves as you predict, you win; if it moves otherwise, it is a loss. Most times, these assets are financial assets, but each individual has their preference for trading.
Sports trading also deals with price rather than a direct prediction of outcomes. You can either back or lay. Backing is when you support an outcome while laying is when you are against it. Whichever way you are banking on price to move in your favor, otherwise, you lose.
Similarities Between Sports Betting and Day Trading
Day trading implies that all your trading activities happen within one day. In short, you don't hold your trade positions overnight. Many people compare it with sports betting, and let's see the similarities that back it up.
They Both Work With Probability
One striking resemblance between sports betting and day trading is probability. Both sectors deal with you directly or indirectly predicting an outcome. And in the end, you are banking on the probability that things tip in your favor.
Neither betting nor trading works with certainty. Irrespective of how you play and the options you use, your win is not 100% sure; you still bank on probability.
Capital Factor
To day trade or bet on sports; you don't need to be a millionaire. Neither of them is capital intensive like other businesses. Most experts always advise you to start small until you master it. After that, whatever amount you need to start is flexible and entirely depends on you in both sectors.
You Can't Master them 100%
Whether trading or sports betting, you can't beat your chest and say that you have mastered it 100%. And why is this so? It is because losses are inevitable. No matter how good you are, losses come occasionally. You can be an expert that knows the way around them but not a master who never loses.
Differences Between Sports Betting and Day Trading
As similar as these two crafts are, they also have their differences. Let's look at what sets these two ventures apart:
Stop Loss and Take Profit
In sports betting, there is nothing like stop loss and take profit. It is very direct; you predict an outcome and wait to either win or lose. You know how much you can lose from the on-set, and you cannot reduce it once you place the bet. The same goes for your profit; once you place your bet, there is nothing you can do to read or reduce it.
In day trading, there is a stop loss and take profit. Stop loss is to regulate how much price moves against you. Once the price hits where you set your stop-loss, your trading platform closes the trade for you in a loss. And if you are uncomfortable with how much you are losing, you can close your trade manually.
The same goes for take profit. Once the price hits it, your platform closes the trade for you in profit. And if you want, you can leave the trade to run and close it manually when you are satisfied.
Availability
You will agree that you can only bet during a sporting event. If no events are happening, you can't bet on games, except virtual sports, which are also unavailable sometimes.
Day Trading, on the other hand, works with the financial markets. The financial markets are available for 24 hours, from Monday to Friday. If you choose to trade crypto, the markets are also active on weekends. Stocks are also from Monday to Friday, but with restricted hours.
Leverage
For now, no betting platform offers any form of leverage. The exact amount you deposit is what you can use to place wagers, nothing more. However, in day trading, you will find several platforms that allow you to trade with leverage. It allows you to make more money on winning trades, even if you have little capital.
Wrap Up
Whether day trading or sports betting, the ultimate goal is to make money. Your preference on how you make money will determine your choice. Trading works better with strategies than sports betting, and it is one reason why many people would rather not classify it as gambling. Either way, it does not change that both of them work on probability.
