Are You Trading or Gambling? • Hacker News Board

Re: Are You Trading or Gambling?

#381

Post by benibela » Sun, Feb 28, 2021, 1:36 PM UTC

xwdv wrote: post #234

I didn’t start making massive amounts of money in trading until I realized a simple concept: Don’t take risks, make them. Essentially you provide an opportunity for others to take risky gambles and profit when they lose. So now I sell way OTM option contracts and make great consistent money. Sure a pro day trader might make more, but I make consistent money and with much less skill or accuracy required. And I still b…

I have started doing that as well this month with CSP

But the disadvantage is the limited upside. If you just buy the stock, you could have unlimited profit if the price goes to the moon, but the option only gives 1%. And you could still lose everything, if the price goes to zero

Re: Are You Trading or Gambling?

#382

Post by tekknik » Sun, Feb 28, 2021, 1:39 PM UTC

mrb wrote: post #361

orangeoxidation wrote: post #309

Earlier quoted context omitted.

> money With built in and inevitable deflation. Bitcoin could never replace a national currency. With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town. It's not money. It's at best "digital gold", but more realistically it's just a ponzi scheme.

« could never replace a national currency » There are plenty of scenarios for Bitcoin to succeed and be useful without necessarily replacing national currencies. « transaction times in the tens of minutes » Wires take hours/days. Credit card transactions take 1-2 days before the seller's bank account is actually credited. Obviously speed isn't an issue for adoption given that people tolerate systems much slower than…

> Wires take hours/days. Credit card transactions take 1-2 days before the seller's bank account is actually credited. Obviously speed isn't an issue for adoption given that people tolerate systems much slower than Bitcoin.

Wires take hours, rarely, if ever days, and in my experience the money is in the receiving account before I hang up from sending it.

Also people tolerate this system because there is nothing else available, and much of it is not a result of lack of desire but anti money laundering. Countries are already moving to digital currency tokens.

Re: Are You Trading or Gambling?

#383

Post by tekknik » Sun, Feb 28, 2021, 1:41 PM UTC

conanbatt wrote: post #346

orangeoxidation wrote: post #309

Earlier quoted context omitted.

> money With built in and inevitable deflation. Bitcoin could never replace a national currency. With transaction times in the tens of minutes and with a maximal global transaction rate of 5-10 per second. The Blockchain couldn't replace the banking system of single mid-sized town. It's not money. It's at best "digital gold", but more realistically it's just a ponzi scheme.

It needs to have demand to be worth anything at all. At that demand in aggregate assigns value to bitcoin. The fixed emission schedule of BTC means that there is no issuer that can capture increased demand in the good, but the holders of BTC get that benefit. So the only thing you need to bet on is if there will be more aggregate demand for the 21 million btc in the future than there is today. With fiat currencies, w…

> If BTC makes it so the aggregate demand in currencies is split partially from fiat into BTC itself, then it will be a great transfer of wealth from governments into BTC owners.

And will quickly be banned by said country.

Re: Are You Trading or Gambling?

#384

Post by tekknik » Sun, Feb 28, 2021, 1:45 PM UTC

solosoyokaze wrote: post #323

albntomat0 wrote: post #319

Earlier quoted context omitted.

I understand and appreciate the point you're making (I want to add this as my response is slightly flippant). How many BTC will it take to buy a Toyota Corolla in Feb 2022?

Hopefully less than in Feb 2021. I think a better question would be, how many BTC will it take to buy a house in 2050? I think the three things that have experienced the most drastic inflation are: housing, healthcare and education. It would be interesting to measure Bitcoin's long term value next to those highly inflating costs. Say a house now costs 10 BTC/$500,000 and in 2050 10 BTC/$2,000,000.

> Hopefully less than in Feb 2021.

Financial planning -> window, cause my base currency keeps moving around and won’t hold still long enough for me to even finish the equation.

Re: Are You Trading or Gambling?

#385

Post by tekknik » Sun, Feb 28, 2021, 1:49 PM UTC

IgorPartola wrote: post #241

JMTQp8lwXL wrote: post #231

Earlier quoted context omitted.

Things only have value because we agree they do. The US Dollar is backed by the full faith and trust in the government. "Faith and trust" is as much a digital tulip.

I find that to be a somewhat reductionist view. First, some things have a fundamental energy cost. Food is one example. You can’t value food for free even if we agree to, because it takes kWhs to produce it and they have to come from somewhere. I guess you could say your life isn’t worth the cost of the food to sustain it and stop eating it, but not many will do that. Second, you have natural scarcity: truffles are n…

The difference being one is the laws of physics and the other is artificially man made, doing nothing.

Re: Are You Trading or Gambling?

#386

Post by tekknik » Sun, Feb 28, 2021, 1:56 PM UTC

mitchdoogle wrote: post #277

toss1 wrote: post #174

Earlier quoted context omitted.

Yup. And that key feature of "sending money over the internet" thing hasn't worked out very well so far I've been in it, found the entire system wanting, and got out. May get in again to enjoy gamble in speculative bubbles, but as a technology, it is still in the early and massively-sucking and increasingly-sucking days. Like railroads in the 18th century, they utterly changed society, but most investors lost their s…

I know I'm just a single point of data, but I routinely buy things on the Internet with Bitcoin that cost $200-300 USD. I always set the fee to just under a dollar and have never had any issues with the transaction being confirmed within 20-30 minutes, including in the last few weeks. Of course, paying with Bitcoin saves the seller about 3% of the final cost, and they need not worry about chargebacks, which saves the…

> Of course, paying with Bitcoin saves the seller about 3% of the final cost, and they need not worry about chargebacks, which saves them more money in the long run, so they offer a discount when crypto is used. It's a win-win for me and the seller.

But where are the benefits for the buyer? I have to go out of my way to buy BTC, when I’m paid in USD, and the value changes so quick that if I don’t want to hold BTC the buying the exact amount will be difficult, get to deal with fun taxes at the end of the year, and all of this because “fiat is bad” and to give up my rights to a chargeback. And then one day SHA256 will be broken, as all hashing functions eventually are, and then what?

Re: Are You Trading or Gambling?

#387

Post by Raidion » Sun, Feb 28, 2021, 1:59 PM UTC

hgjnhikn wrote: post #138

Raidion wrote: post #133

Earlier quoted context omitted.

I (and I think a lot of poker players) would disagree. Everything in life involves some sort of risk, but doesn't mean it's gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % d…

Bet sizing in poker is not determined by the Kelly criterion, it's determined by maximum expected value with at most a tiny penalty for high risk. Where you could in theory apply the Kelly criterion is in selecting which stakes to play at. But in practice it seems more chosen through rules of thumb / common sense / feeling than an actual application of the Kelly criterion.

Yes, exactly. Bets in the game are determined if they are plus EV, but what game you sit at is determined by Kelly Criterion (or usually a 20-25 buyin roll depending on the game, your life roll, etc)

Re: Are You Trading or Gambling?

#388

Post by tekknik » Sun, Feb 28, 2021, 2:00 PM UTC

lottin wrote: post #237

thebigspacefuck wrote: post #192

Earlier quoted context omitted.

You can buy drugs or a hitman online without being traced. Also ransomware can demand payment in Bitcoin without being traced.

By design all movements of bitcoins are in the open, so I don't know about not being traced.

Because when you create a new BTC wallet you give the network your SSN and other identifying credentials yes?

Re: Are You Trading or Gambling?

#389

Post by Raidion » Sun, Feb 28, 2021, 2:03 PM UTC

ReggieCommaRose wrote: post #322

Raidion wrote: post #133

Earlier quoted context omitted.

I (and I think a lot of poker players) would disagree. Everything in life involves some sort of risk, but doesn't mean it's gambling. Gambling is defined exactly by those two properties. You could die driving to the store, but the odds are tiny and the benefits are huge. Driving to the store isn't gambling. Are casinos gambling when they let you play blackjack? No, the bets are +EV, even those they are only a few % d…

I used to play full-time and I currently work in trading. Poker is definitely gambling. Casinos are gambling, they’re just doing so with massive volume and tiny risk (afaik). Trading is gambling. Gambling well is a subset of gambling.

I think I would be OK if we wanted to define all endeavors with an unsure outcome gambling, but I believe that makes most things in life gambling which means we need another word for especially risky endeavors with an unsure outcome.

I think we have the same concept, but I'd be happy to call trading gambling if playing poker table games was called gambooooling.

Re: Are You Trading or Gambling?

#390

Post by dfdz » Sun, Feb 28, 2021, 3:02 PM UTC

> A 101 on not gambling: Don’t make negative expected value bets

This advice seems like a good general rule of thumb, but I don’t think it holds up on scrutiny. For example, I consider all purchases I make to be investments.

I am a safe driver, but still decided to pay for comprehensive car insurance (above what is required by law). I understand this investment has a negative expected value, but helps to reduce the variance of my “portfolio”.

Similarly, if there is a large planned withdrawal from a brokerage account in a year, I could imagine someone buying some slightly below the money puts on the assets (with negative expected value). Now you could argue that the bet as a whole has a positive expected value.... maybe the advice could be better phrased as “make sure that in sum your investments have a positive expected value”....