you might be a fan of gambling in casinos but the term casino financing or casino economics
might sound strange to you so you might ask the question
what exactly is casino economics?
well casino financing is a term for an investment strategy that is deemed highly risky.
wall street in other words proposes high stake plans
or portfolios in the expectation of winning the lottery
it is argued that casino finance is not borrowing but rather gambling .
casino financing is the study of casinos and gaming
in which players have little or no influence on the results of their wagers
the words are often used to describe big bets on investments
that are usually pretty high risk but have a high potential return
however just as in a casino the investor might lose everything
casino economics or finance is a term used to describe high dollar market bets
that include high risk acquisitions and or heavily leveraged portfolios
many that use these strategies normally take on a lot of pressure
in the hopes that they make a lot of money although most investors favor
a more cautious approach. some investors are willing
to take on a significant amount of risk in exchange for the chance to earn high returns
you'll need a perfect casino funding mindset to beat the casino system.
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from part-time hobbyists hunting for additional cash
through global institutions transferring billions of dollars through thousands of securities.
financial markets draw a diverse range of investors part-timers and at-home players
compete for profits with conventional funds and lightning fast computer
algorithms in the trading game which spans all ends of the continuum
according to data the majority of traders who play in the shallow end of the market pool
will ultimately lose and either pick up stakes entrust their capital to someone else
or just give up and look for another way to create wealth
many of these people ironically never had a chance to win since they entered the game
with a casino mindset that guaranteed defeat
so, what is a casino mindset and how can it interfere with a trader's goal of profit?
is this erroneous approach exclusive to beginners?
or does it even affect seasoned traders?
what is the best way to get rid of the gambling mindset
and replace it with a methodical strategy that can lead to a lucrative future?
in speculation,
here are just a few important points in my casino playbook that will be discussed in this video.
1. both investing and gambling entail putting money at stake in the hopes of making return.
2. by concept investing is putting the capital to work
for it to rise in the future and therefore have a good potential return despite the costs
3. gambling on the other hand is described as betting on games
of chance with no talent involved and a negative anticipated return
4. if you approach trading as if it were a casino you are likely
to make poor bets and eventually lose money but if you deal in a controlled objective way
and stick to a sound plan your transactions are likely to pay off in the long run.
THE CASSINO MENTALITY MINDSET
many new traders see their presence in the stock markets
as if it were a holiday to las Vegas with the hope of exchanging the cash
that they have in their back pockets for a larger one when they depart
since they are indifferent to the essence of risk and hypnotized by the desperation that binds
all get-rich quick schemes many of these people haven't
studied simple trading tactics and techniques new traders have been programmed by the media and
their colleagues to see shares as betting sheets and the broad market as a competitive event
in which everyone will win if they root for the right team
since they don't grasp how markets pick the pockets of traders
who throw money at stocks with the same zeal as coins tossed at one arm bandits
in the hope of reaching that sweet sweet jackpot the game seems black and white to them
minor pay-outs at regular intervals similar to a slot machine
increase the incentive to place large bets whether or not they're acceptable to the business
conditions and opportunities at the moment this selfish action rarely
pays off with a large victory but it almost always results in steady losses
over time, setting the stage for disappointment and eventual departure from the game
their fate is sealed by their lack of a definable edge
just as is for gamblers who play for the thrill of it
but refuse to learn the odds for each game and how to react in a way
that reduces or eliminates the house advantage meanwhile regardless of whether they win or lose
all groups of people get secondary motivation for their negative behavior
when their bodies emit dopamine and endorphins while they play
when stocks or instruments approach binary events such as earnings results or economic releases
which cause dramatically higher or lower security prices
the casino mindset absorbs the most money
at these inflection points smart traders move aside or hedge beds
because they don't know what will happen and guessing isn't a feasible tactic
meanwhile the infected dealer goes all in taking huge positions
when they are fixated on the winning side of the equation
completely oblivious to the high cost of being mistaken
is it a beginner's flaw or a lifelong affliction ? the casino culture mainly impacts newcomers
and it is an inevitable result
of a lack of knowledge of how capsule markets function
many of these people will sooner or later benefit from their experiences
and use the eventual defeats as a wake-up call to take the subject matter more seriously
as a result you'll have the drive to sit down and master
the fundamentals of planning, role, scaling, optimistic expectancy and risk control
though newcomers will easily lose money if they don't get rid of their casino mentality
seasoned traders will harbor aspects of this negative attitude for years
though it doesn't overpower their tried and true tactics
this mindset will emerge as greed triumphs over discipline
it isn't lethal in small quantities and it can add a little excitement to the trading day
if place sizes are kept small these are dubbed lottery tickets
because they perform well when traders are faced with binary situations
they've seen it enough times to think that they have a better than 50 - 50 chance of being right
ftse Russell for example rebalances the common index portfolios once a year in June
causing rallies when fund managers must purchase new securities
if experienced traders guess the additions ahead of time
they will book windfall games since it is a conditional case either
defense is introduced or not years of seeing the mechanism provide a slight
advantage that traders used to play with a basket of stalks they believe would be added
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getting rid of the casino mindset the most effective defence against
the casino culture is education begin your trading career by
reading quality instructional materials on investment, trading and stock market history
then look at the materials in your field such as security
analysis by Benjamin graham and David dodd if you're interested in fundamental analysis
and technical analysis of stock trends by Robert d Edwards and john McGee.
if you're more interested in technical analysis read biographies on prominent traders and how
they made their fortune such as Edwin lefear's 1923 biography of famed trader Jesse Livermore
reminiscence of a stock operator quick forward to the new age and
study top investing and market timing books from the last few decades to supplement
your classic expertise realistically many newcomers skip the educational
route because they are perfectly happy following the promise of quick profits
searching for huge paydays without breaking a sweat in the markets logistically
this benefits more serious players by creating a huge supply of fumbling shaky hands
which increases the incentive value at critical business turning points the often asked questions
is that the same as going to a casino to play the money market that might be if you buy stocks
at random on a whim or rely on speculation a diversified and well-researched portfolio
or being actively invested in a large stock market index has a favourable projected return
and can on average increase the capital over time on the other hand once you've
reached a casino you're already out of money according to the experts
what is the difference between speculating and gambling ?
even though speculation is very dangerous it also has an optimistic predicted return
even though the return never materializes gambling on the other hand
still has a negative estimated return because the house always wins gambling has a
very brief time horizon as well you make a wager and then turn the wheel when it comes to
investments particularly speculative ones a longer time horizon is always needed or not
is it possible for trading to become addictive in the same way that gambling can be?
trading can be thrilling calming mental and just engrossing
all of this can trigger the reward centre in the brain
the brain produces feel-good neurochemicals like dopamine and serotonin
while a day trader makes a profit or even gets excited about a future profit
as a result much like with casino gaming or consuming illegal drugs you might get addicted
so how dangerous is it to have a trading addiction?
well a trading addiction can lose you your work personal relationships
and of course your financial capital much like any other serious addiction
that's it for today's video i hope you've had an educational experience of casino economics,
the casino mindset and how to go about starting out betting in a casino
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until then stay safe and see you in the next video
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