Define Speculation & gambling

Dear Friends,
I often come across People commenting "Speculation & Gambling" while trading in stocks.
Could you define the meaning of both in general & then in particular with respect to trading in shares, without any ambiguity,so that even a lay man could understand the difference if any,preferably with an example.
If they are different,how these actions affect an individual,both psychologically & materialistically.
Happy trading.
ranga

Only difference between Speculation and Gambling is risk management.
The word Speculation means--"to look-after"(risk)

Speculation: 1. Sending your kids to school, hoping they will pass! 2. Hoping that your 8:20 bus will come on time, and you will reach your office by 10.

Gambling: 1. Sending your kids to school, hoping they will end up in MIT. 2. Hoping Ash will give you a ride at 8:20 and you will reach office, half an hour earlier!

ss

Hello Mr Rangarajan

Speculation in financial market happens for price discovery for an asset. It is more of scientific and based on well established theories and techniques. Whereas, the gambling is based on hunch and doesnot have any scientific approach.

In speculation you know your risk tolerance and exit with small profit or loss, whereas in Gambling your capital is lost, if your hunch is wrong.

I trust, I am right in my explanation.

C T Ramesh Raja

Dear Mr.Ramesh Raja,
Welcome to this eminent forum.
If you are the same RR who gives daily trading levels for Intraday Trading at 'icharts.com',pl accept my compliments for the Amazing accuracy,with which the shares behave at yr levels esp at Break down & Break out to reach the targets.This is available FREE at icharts & members may visit & experience the thrill themselves.
Readers may pl refer to my thread on "Break out & B.D levels for stocks"where Traderji had given some useful tips aswell.
Coming back to yr reply,i wonder why not the same risk tolerance & exit could not be applied for Gambling aswell & why wait till the capital is lost.
Happy trading,
ranga

i am commenting....all defn and explanation excellently expressed..
beautifully illustrated..

gambling..more on instinct driven, achieving fun or excitement..at the cost of time and money...
speculation:..ultimate goal of daytrader..
he knows risk involve, ultimate odd
normally taken on known stock..where due to superiority of knowledge risk is less, as chance factor is there,he is prepared to SAVE MONEY, EARLIEST SIGNAL KNOWING HE IS WRONG..

NOTE. we aim to speculate, but turn to gambling. due to internal conflict
thus go through roller-coaster... crash land or safe land depending upon luck

oilman5

Nice way to put it. Whatever be it, need to have that background to take the hit or u r gone. (ram naam satye hain)

Mr Ranagarajan

I am the same C T Ramesh Raja and I am only posting my Breakout Technical System for day trading in icharts.in. I am willing to help daytraders herealos with the same set of levels. Since I am new to this Forum, I do not know how to do this and will the people here accept me. I Also do not know the moderator of this forum and going forward with my association here, I will be become more comfortable.

Thanks for your nice words.

Hi CT RR,

glad to see you on this forum , hope we all could learn a lot from you.

Regards,
Winston

Hi,
Result manifestation in both
Gambling = absolute Random;
Speculation = A pattern in Random;(This yr the Science Nobel prize is given to an Economist ,where he showed there may be a definite pattern in Randomness).

Asish

NB: Nasem Taleb's Book "Fooled by Randomness" has very well depicted the conflict in stock trading.