How would you make money ?

[Guest]

Hi,
I suggest that until you *do* understand this, that you not take up any form of gambling, whether it be at casinos or on the stock markets.

Perhaps the best way to illustrate is with two kids matching coins.  Let's say that one kid starts with fifty coins, the other with five.  The odds of losing five times in a row is one in thirty-two.  The odds of losing fifty times in a row is one in about 1,000,000,000,000,000.  Now, most of the time the kids will be close to their original values, gaining a little or losing a little.  But every now and again, one will have a 'bad streak'.  The odds of a bad streak long enough to wipe out the five coin kid are about 1,000,000,000,000,000,000/32 as likely as those to wipe out the fifty coin kid.

Applying that to the market is a little bit tricky.  First, except for a flat market, stocks are not 'zero-sum'.  Second, in stocks, one has more of a choice of which 'games' to play and at what odds.  And, third, by playing multiple games one can hedge the riskier bets.  But the principle is the same -- the smaller the stake, the more likely you'll lose it all.

--Pete

EDIT: Just a brief note to clarify a point: while the odds of the respective streaks are as noted, the actual odds of losing all one's money in the simple game are
(the amount of money you start with)/(the total amount of money in the game, including yours).
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All right Pete,I understand what you meant.
Still,one cannot compare casinos with stock markets;the first one is based on pure luck while the second one can be mastered by technical analysis.I don't have the knowledge to compete with the day traders,so I'll just don't buy/sell stocks;I leave that for the experts.You were right,day trading is almost like gambling,esp without any knowledge.As for casinos,I let that thing for the losers/gamblers.
Thanks everyone for you precious advice,except Deebye for his 'bet it all on black'.