Those traders who don’t acknowledge the intrinsic nature of luck in the trading will never develop the emotional strength to survive its many ups and downs. I see this regularly with my subscribers. The fair weather fans who join me for a month or so, inevitably leave disappointed the moment we hit one or two losers in row. The ones who join us for a quarter generally have a more positive experience and those who have been with us for a year or more see their trading accounts inexorably grow larger over time.

Yet while luck is an inevitable element of the game, it is by no means the only variable that matters. That's why comparisons between gambling and trading are essentially false. Take poker for example. It's a game of chance most often compared to trading. Both activities require skill and luck in order to succeed. However, trading when practiced properly offers much better odds.

One of speculators' greatest advantages is the ability to stand down when no compelling opportunity presents itself in the market. A poker player has no such luxury, as every hand requires an ante that can ultimately deplete the roll. Watch any poker tournament on TV and time inevitably comes when even the greatest players are faced with an “all in” moment. A professional trader who practices proper risk control and money management should never, ever come close to an “all in” scenario.

In our worst drawdowns to date, we have never lost more than 6% of our capital on a cash-on-cash basis and even at 10 times levered we preserved more than 40% of the account at the depths of the bad run. There is, of course, no guarantee that we won’t do any worse than this, but as long as we maintain our discipline we stand a overwhelming chance of remaining in the game to live and fight another day. However, no such assurance exits in poker.

Trading is not gambling, but is subject to luck, which on surface can make it appear as though it is a mere game of chance. In fact, the longer you trade, the more you realize that trading is the art of removing as much of the gamble from the trade as possible. Novice traders spend all their time in the market, participating in the “action.” Professional traders spend all their time staying out, and enter only when the odds favor the trade.

Boris Schlossberg serves as director of currency research at GFT, and runs bktraderfx.com.