Forex Trading Tips: Sucker Bet
I’ve been to Vegas more at least ten times and during all those visits I’ve gambled just once. A few years ago I walked into Barnaby Coast casino placed a dollar bet on a slot machine, made 110 cents and promptly cashed in the ticket happy to pocket a healthy 10% return. My reluctance to gamble in Vegas stemmed partly from the fact that I am woefully ignorant of card games ( I barely know the rules for blackjack and poker) and partly from an gnawing gut feeling that I was being ripped off. On my latest visit to Sin City I realized my skepticism was well founded. Vegas is one giant sucker bet.
On the night of my departure, I arrived at the Las Vegas airport and hour an half early and my friend who accompanied me decided to kill some time playing video poker. My friend, who has also been to Vegas on numerous occasions, is far less reticent about gambling than I am and has been known to stay up nights playing marathon games of poker. She settled comfortably into the chair and fed twenty bucks into the machine asking me to join her. Never having played the game I was curious and decided to give it a try.
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Within a few seconds of play it became crystal clear to me that the game was massively rigged in favor of the house. Even with my rudimentary knowledge of poker I realized that the machine which only paid out even money on pair of jacks or better was essentially an ATM in reverse. Sure enough it took both of us less than 10 minutes to lose our bankroll and I left Vegas a few dollars poorer but wiser.
All my life I have always wondered why millions of people would voluntary allow themselves to be robbed in Vegas. Some analysts claim that most people play for the thrill of the game and not necessarily the monetary reward, but that games are hardly thrilling. They are monotonous and repetitive. After 10 minutes of play what thrill is there in video poker? Instead I think most people gamble for one reason only – hope of hitting a big one. Our instinct for greed which casino exploit with ruthless efficiency tempts us to constantly bet, until our wallet is empty.
The market is not a controlled odds system and therefore of course is not Vegas, but there are enough similarities between the two that as traders we can learn a tremendous amount about the nature of the game. Much like the casinos in Vegas our quote screens scream to us constantly – play me! The thrill of the ride in the currency market where the stories are global and historic and different every day is in many ways far more powerful than the bland possibilities of trying to calculate your chances of drawing a royal flush.
As speculators rather than gamblers however we have one and ONLY one edge in the system. We can choose to play only when we think the odds favor a positive outcome. Unlike gamblers who must pony up money every time they play the game, we can enter and exit markets at will and that ability is perhaps the single most powerful force in our favor.
Unfortunately, few of us have the discipline to stay out of the markets until a high probability setup presents itself. In fact most traders will not only take very weak versions of their setup, but will often deviate altogether from their game plan just to participate in the market. The end result is utterly predictable as the market just like Vegas takes back our hard earned profits. In the end it is very important to have no illusions. Like Vegas, the market is not your friend. It certainly does not owe you a living. In fact it will do everything in its power to take away your bankroll if you are not disciplined and well prepared. That’s why as traders we should never fall victim to wild eyed optimism of gamblers, but rather strive for the clear cold calculating attitude of seasoned speculators.
Trading isn’t gambling, but it can quickly become that if we lose control. That’s why Vegas stands as such a powerful testament to the danger of making sucker bets.