Is stock market gambling?

IS TRADING , INVESTING IN STOCK MARKET GAMBLING?

I have heard many people saying “putting money in stock market like gambling”. I am sure you might have heard as well.

            Today I will try to clear all the myths people have in their mind regarding stock market.

Stock market no doubt is unpredictable, same as weather forecasting.  Knowing the weather in advance still not 100% guaranteed, even with the introduction of many advanced cutting-edge technologies. But still we can’t completely ignore any sign of warning or prediction about heavy rain, cyclone or monsoon etc. we take extra precautions, if needed. Most of the time prediction becomes true and sometimes weather doesn’t occur as expected. In the meantime wind changes its way or something happens, that causes the prediction wrong.

            That doesn’t mean we stop watching weather predictions in TV news ,or in newspaper. The weather prediction people, sitting in the department, they highly experienced, with years of experience in watching the weather ,its behavior, knowing the patterns, wind change patterns, they able to predict the future weather .

           Now coming to the stock market, knowing how the stock market might behave, one needs to be very experienced. Experience is the greatest teacher in stock market. Like the weather-forecasting, in the stock market, there are various indicators that helps us predicting the possible market outcome in few days or months.

·        Investors-fundamental indicators

·        Traders-various technical indicators

But it doesn’t mean, what we got or predicted from the indicators that would happen 100%. Might be the case that indicators were right, but we made mistakes in understanding the indicators, or due to sudden changes in political, economic events, market might have behave differently.

            Most of the early traders or investors fail miserably in stock market , because even if they not experienced, they try to play it like gambling. Most of the new traders or investors try to make lots of money , as soon as from the start day of entering into stock market .So they take unnecessary risk, carried by emotions ,as a result they devastated by failure and stock market and  completely lose their money. The same people afterwards keep saying other people that “stock market is like gamble”.

            There simply 2 rules  to be successful in stock market.

1. Have great patience .Let the market be your teacher
2. Follow strict disciplines that required in stock market.

•                    Risk management(don’t take unnecessary risk, cut the losses as early as possible)

•                    Don’t be carried away by your emotion(Market doesn’t behave according to anyone’s emotion )

            Following the above rules helps investors or traders in surviving longer time  in stock market and minimizes the risk of getting blown out of all the money and profit more out of the market.

Coming to the topic “stock market gambling or not?” depends how you play in this unlimited world of profit.

       You like to play like a gambler or you like to play like a successful experienced trader, investor .!