The Sarvesh Mishra Show · Episode 36 · Trading

Is Trading Gambling? A CA Explains the Real Difference

Published 16 Oct 2026 ~12 min read Trading · Risk · Discipline

Guest Expert

CA Nitin Murarka

Chartered accountant · NitinMurarkaNifty

Host

Journalist · Interviewer · Storyteller

Information only — not investment or tax advice. Trading involves the risk of losing money. Tax and regulation change, so check current rules with a qualified adviser and with SEBI before you act. This is a different conversation from CA Nitin Murarka's episode on why option buyers lose money, and from Deepak Wadhwa on option trading and Priyank Sharma on intraday traps.

Watch TRADING = GAMBLING? Aaj Final सच समझ लो! | Sarvesh Mishra | CA Nitin Murarka on YouTube

Watch: TRADING = GAMBLING? Aaj Final सच समझ लो! | Sarvesh Mishra | CA Nitin Murarka · ~56 min

Every week, thousands of new traders open an account believing they have found a smart way to make money. Every week, many of them watch their savings shrink and wonder whether the market was ever fair. So the question refuses to go away: is trading just gambling with better charts? Sarvesh Mishra puts that question to chartered accountant CA Nitin Murarka on The Sarvesh Mishra Show.

For the series itself, start at What Is The Sarvesh Mishra Show?

Behaviour

The same option contract can be a calculated trade for one person and a bet for another

Stop loss

A trader sets a fixed loss limit; a gambler bets more to win losses back

Records

A trader logs every trade; a gambler remembers the wins and forgets the losses

Framework from the episode brief. Not a promise that any method will make money.

Trading vs gambling: the real differences

The difference is not the product you trade. It is how you behave.

Habit	Trader	Gambler
Edge	A tested method with rules you can measure	No edge, because the odds favour the house
Risk control	A fixed loss limit on every trade	Bets more to win back losses
Decisions	A plan written before the trade	Hope, tips or emotion
Record keeping	Logs and reviews every trade	Remembers wins, forgets losses
Capital	Money they can afford to lose	Often borrowed or essential money
Time frame	A defined holding period and exit	“Let me see what happens”

Trading vs investing vs gambling

Investing aims to grow wealth over years. Skill matters through selection and patience, and the main risk is normal market ups and downs.

Trading tries to profit from price moves over a shorter period. It needs strategy and discipline, and the risk is higher, especially with leverage.

Gambling is a bet on a chance outcome. Skill matters very little, and losing everything is common.

Signs your trading has turned into gambling

You trade without a written plan or stop loss.
You increase your size after a loss to win it back.
You trade because you are bored or excited, not because a setup appeared.
You use borrowed money or money meant for bills.
You cannot state your results for the last 20 trades.
You follow tips without understanding the reason for the trade.

Pause if this sounds familiar

If three or more of these apply, pause and review your process before placing another trade. This is a warning, not a method to chase losses.

Why most new traders lose money

Regulator studies of individual traders in the futures and options segment have repeatedly found that most of them lose money. The reasons are not mysterious. Leverage magnifies losses, costs and taxes eat into small profits, and emotions push people to break their own rules. Read the latest SEBI study yourself rather than relying on any single number quoted online. The popular “99 percent of day traders fail” line is a claim, not a fixed fact; studies report different figures.

A pre-trade checklist to protect your capital

Ask these before you click buy or sell

If you cannot answer them calmly, sit out the trade.

Is this money I can afford to lose?
What is my entry, my exit and my stop loss?
How much will I lose if I am wrong, and is that a small share of my capital?
Does this trade follow my written plan?
Am I calm, or am I chasing a loss?
Will I record this trade and review it later?

Common mistakes beginners make

Trading without a stop loss. One bad trade can erase weeks of gains. Decide the loss limit before you enter.
Over leveraging. Small moves cause large losses. Size positions so a loss stays small.
Revenge trading. Emotion replaces the plan. Stop for the day after a set loss.
Following tips blindly. You do not know when to exit. Understand the reason or skip the trade.
Ignoring costs and tax. Profits shrink after charges. Track net results, not just gross.
Skipping the review. You repeat the same errors. Log trades and review them weekly.

Frequently asked questions

Is trading gambling?

It can be. Trading with a tested method, strict risk limits and honest records is different from betting on hunches. Trading without those habits behaves like gambling.

Is trading 100% gambling?

No, but it can behave like gambling. The difference lies in having a tested method, strict loss limits and honest records.

Is F&O trading gambling?

Futures and options use leverage, so mistakes cost more and faster. That makes discipline more important, and it is why studies show many individual traders lose money.

Why do 99% of day traders fail?

That exact number is a popular claim, not a fixed fact, and studies report different figures. The consistent finding is that most individual traders lose money because of leverage, costs, taxes and emotional decisions.

What is the difference between a trader and a gambler?

A trader works from a plan with a defined risk on every trade and reviews results. A gambler relies on hope or luck and often increases bets after losses.

Is trading gambling or not in India?

Trading on recognised exchanges through SEBI registered brokers is a regulated activity, not gambling in law. How you behave still decides whether it feels like a calculated risk or a bet.

Is trading illegal in India?

No. Trading on recognised exchanges through SEBI registered brokers is legal. Be careful with unregulated apps or offshore platforms that promise easy returns.

Is trading gambling or business?

Regular trading income is often treated as business income for tax purposes, but the category depends on the type of trade, so confirm with a chartered accountant.

Can you make a living from trading?

A small number of people do, but it takes skill, capital, discipline and years of practice. Treat it as a business with risk, not a shortcut.

Is trading a good career?

It can work for a small number of disciplined people, but it brings uncertain income and real risk of loss. Most people are better off treating it as a side activity while they build skills and keep a stable income.

Trading vs gambling, which is better?

They are not equal choices. Trading can be done with risk controls and a plan, while gambling is built around odds that favour the house. Neither is a safe way to earn a regular income.

How do I trade without gambling?

Use a written plan, limit the loss on every trade, avoid borrowed money, keep records and review your results regularly.

The practical thread is behaviour, not a chart: a written plan, a stop loss, money you can afford to lose, and a log you actually review. Watch the episode for CA Nitin Murarka’s answer in his own words, then check yourself against the checklist before the next trade.

Sarvesh Mishra is an Indian entrepreneur, journalist, interviewer and the host of The Sarvesh Mishra Show. He is the Founder of Red Hot Media House Pvt. Ltd. and CureSoulLife Pvt. Ltd., and the author of Love With Benifit.

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