Stock exchanges and the stock market usually have several things in common. The most common thing among the two is the fact that both involve making decisions and taking risks that could result in loss of money. There are several success stories of people who won big on JackpotCity online casino’s, after a series of critical decisions. In this guide, you’ll find some of the similarities between the stock exchanges and online casinos.
It’s All About Managing Risk
In both gambling and stock exchanges, you’ll encounter the phrase “high-risk, high returns.” The questionable school of thought suggests that in gambling and investing, one has to risk more to get more. However, the amount of money you decide to use comes down to risk and choice.
For a trader, they must decide how much of their capital they are willing to spend in one trade. On the other hand, a gambler must determine how much of their bankroll they are eager to spend on one bet. Apart from the willingness to take risks, a gambler and a trader must have a risk management strategy.
Traders diversify their investment portfolio so that a rise in one asset covers the downfall of another. For a gambler, it is all about finding the balance between potential gains and potential losses and the possibility of a bet going their way.
House Edge Vs. Professional Fees
Every online casino has a house edge, which is the in-built expectation and facility the casino uses to make money. The Return To Player (RTP) rate of an online casino slot game is usually less than 100%. What this means is that “House Edge” is the difference between the RTP and 100. Some players receive more while others receive less. But the expectation is that the game will earn more than those that gamers that play it.
A stock trade does not have an RTP, but some amounts will come out of your investment. For instance, if you use a professional advisor, you’ll incur professional fees, which are deducted as a lump sum or a certain percentage. When you put your money in a particular stock, you’ll also incur transactional fees, drawdown fees, or access fees. It would help if you also considered tax.
Successful investors study the form of stocks. They are always aware of the stocks that are performing well and the ones that are struggling. They use essential data to evaluate the past, current, and future
performance of the stocks they trade in. Also, knowledge of how one stock’s performance will affect the other helps them know where to move to move their money.
A good gambler applies similar strategies. A good example is sports betting. For instance, a punter looks at the previous performance of a team before staking on them. For example, a team that has won its past three matches playing against a team that lost the last three games is likely to win. They must analyze the teams’ form before putting their money on them.
Trading in stocks will always be regarded as more “legitimate” than gambling because it is not seen as a “vice.” Therefore, most people feel more comfortable investing in stocks than putting their money in gambling. But, the two are similar, but more often than not, gamblers know they are gambling while traders don’t.