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Tagged: Risk Reward Ratio
Is Stock trading is gambling or Business? How?
Stock trading can be considered both as a Business and Gambling. It all depends on the way we approach the market. If we trade with mere speculation without any proper trading plan it is considered as Gambling, however if we trade the market with proper plan with understanding the risk/reward ratio and execute the trade if and only the reward ratio is greater than the risk, then we can consider it as a Business.
Stock trading can be done as Gambling or Business.
If the stock trading is executed with knowledge and Discipline, it becomes Business. Knowledge is aware of the risks and rewards and and executing the stocks only where the risk < reward. Discipline is taking decision based on rational aspects and not on emotional aspects.
If the stock trading is executed without any analysis or with the risk > rewards, it becomes Gambling.
stock trading is determined to be gambling or business based on risk involved. if the risk is greater than the profit then its termed to be gambling. if the risk is lesser than the profit then its termed to be business.
Stock trading is Business if you do the good trade(i.e your reward is more than risk).
If you trade with KNOWLEDGE and DISCIPLINE definitely it is a business.
But if your risk is more than your reward then you are doing a Gambling.
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