Gambling or Trading

Gambling: take risky action in the hope of a desired result; a risky action undertaken in the hope of success. 

Considering that I have started to class myself as a trader (albeit a very new trader) and not a gambler. I am quite surprised at how the definition of gambling seems identical to what I try to achieve with my trading.

A gambler in the traditional sense is prepared to lose his entire stake on an event. He may study statistics, research the likely outcome, look for odds that he is happy to receive and weighs up the risk to reward ratio. Once this is done, he will not back out from his conviction, he either wins or loses.

As a trader, I do gamble every time I open a trade. However, there is a slight difference. I do not gamble on the outcome. I gamble on the price. The aim is not to lose my stake. When I open a trade, I aim to buy low and sell high. The price can either go up or down. If I am right, I will make a tiny profit. If I am wrong I will make a small loss. In addition, as a trader, I try to minimize my losses. This is through managing the level of risk I am prepared to take to gain that little bit of profit. E.g. To gain 1 tick profit, I may be prepared to risk 3 ticks. 

Finally, as a new trader, the idea of Betfair going down, or being unavailable to close a trade is a real spanner in the works! There are steps that I have taken in order to ensure I minimize the risk, but if the backups fail, then in effect I become a gambler. I have no control over managing the risk, and I either win or lose the entire stake. That scares me!