The Difference Between Online Gambling and Online Trading: Who's The Bad Guy?

As the US's Unlawful Internet Gambling Act takes over the news with stories of finances and the Internet, many are starting to wonder what the real difference is between online gambling and online trading?

Two people are sitting in their offices risking money online, one is breaking the law, the other is not. One of these men is a day trader, and no matter how you look at it, this man is risking his money for the chance to get back more money. It seems to me that both men are using the Internet for the same reason. However the one that is gambling online is now participating in an illegal industry. Why illegal? Because the US government doesn't get a nickel in income from the online gambler. It only gets tax money from the day trader.

Every day Americans lose millions of dollars from trading stocks, not based in Wall Street offices, but from their living rooms. These normal people are not professionally trained stock brokers, and hold no license - yet they face no legal obstacles to risking their money online.

In fact the only real difference between day trading and online gambling is the amount of money the US government makes out of the industries: Day Trading online = lots of money; Online Gambling = no money. There is much speculation that the US Congress passed the anti-online gambling ban for the exact reason that they are not getting any revenue off the millions spent each day.

The US Government is saying that they outlawed online gambling to save the American public from a dangerous pastime - one that can addict players and destroy families by causing players to lose all their money. Yet they continue to allow unlicensed persons to trade stocks online. Perhaps no one remembers the reason that large buildings have windows that don't open: it is tp prevent all the day traders from plummeting to their death after losing it all!

Day traders generally get tips from a third party, and sometimes they simply guess at random. There was a time when everyone was investing and making a fortune, until the bubble burst and many were left with nothing but a pile of debts.

If online gamers are famous for one thing, it's taking an interest in what they do. Almost nobody gambles online on a consistent basis without studying the games they play, the strategies, the statistics and the art of gambling. As online players improve,e they play against others at a harder level, but no beginning online player is forced into a poker room with professionals.

There are real people today making a living off online gambling. Amateur players have earned up to $10,000 a month, and although they are not the majority, they are the cream of the crop. All of these professionals are now officially out of work thanks to the new online gambling ban. And gambling professionals aren't the only ones suffering. Many people around the world are losing their jobs due to cutbacks in the online gambling industry.

If the US Government wants to save Americans from losing millions, why are they still letting the legalized form of gambling called day trading ruin the lives of regular people?

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Taking a Gamble When Trading

Taking a gamble when trading is always fun, it satisfies your urges to strike it rich with one trade. Just remember to not over gamble. Keeping your gambling managed is something everyone needs to do.

So what do I mean by gambling? Well you know those times when a stock has gone from $50 to $.20 and you think they will recover. You remember when you found a strong stock that you believe will shoot up far when its earnings are announced and that far out of the money call is only $.15.

That is gambling. It is when you are throwing your money away in search of huge unspeakable gains. Now there is nothing wrong with gambling in the stock market as long as it doesn't become a habit, and you manage your risk.

Let us take the managing your risk issue first. When you trade you should already be using proper risk management. By that I mean you should never be risking any more then 2-5% of your account on any one trade.

If you are going for the gamble you probably want to cut that level down even lower. For instance if you normally risk 2% of your account on one trade you might not want to risk any more than .5% of your account for a gamble. Remember you assume you will lose all money you gamble with.

Another way you can determine how much you should gamble with is by simply asking yourself, how much am I comfortable throwing away. If .5% of your account is $300 but you are only willing to lose $100 on a gamble, do not trade more than $100. Toss the $100 away, assume it is gone but hope it comes back to you as $10,000.

Also you should never get carried away with gambling in trading. That is not a good trading strategy. You should only take a big risk once or twice a year, or whenever you find those big rewards that are too hard to throw away. But any gambling you make as a trader should be small and far apart.

If you are gambling every other trade or even one out of ten trades you are gambling too much. I'll say it again gambling is not a good trading strategy, but it can be fun every now and then.

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