There is a lot of confusion in the minds of people whether trading is similar to gambling. This, however, is not totally true. It depends a lot on the individuals investing style and what his strategy is.

Trading is not the same as gambling. This is because there are fixed odds in gambling for all the common games but when it comes to trading it is totally unpredictable. In trading the house which in this case is the market does not have an unfair advantage that gives it an upper hand. Read bitcoin trader scam review.

However, if you are not disciplined trading and do not stick to your trade strategy, then this would make it difficult for you to be profitable in the market.

To know whether you are trading the market like a trader or a gambler, read on.

Do you go all-in?

Based on what your account type with the brokerage firm is, the firm will offer you to trade with margin. This is over and above the amount that you have in your trading account.

As a trader, you need to have money management rules in place and also calculate the risk-to-reward on each trade. This is important for each transaction that you do. But if you go all-in then this means that you are taking risks that are not necessary. This will cause your profits to fall down substantially.

If you see that you go all-in frequently then this is a sure shot sign that you are trading as a gambler and not as a trader.

Do you overtrade?

Gamblers put money on the table, lose, put money again, lose and put money again and again in the hope that they will win at least one bet. This leads to a financial ruin. This is something that is quite common in the market as well.

Even professional traders have times when they have a bad trading day. If the trader thinks that he is unable to pick up good stocks and profit, then smart traders will stop trading for the period.

But if you are someone who trades even on days when the market is not favoring you and you are putting in more and more money and causing more losses, then this is gambling.

Beating the market is impossible and when you start to try to do so understand that you have crossed the line from being a trader to become a gambler.

Are you taking credit to trade?

Never even take credit to trade in the market. Also, make sure that you do not take loans to trade. This happens when greed creeps in. If you are borrowing to trade or taking out money from your investments to trade in the market, then stop right away. This is not what is called trading. This is pure gambling.

Losing money in the market is fine and this is something that everyone does. But you do not want to be in debt because of the market. You cannot make profits with your own money and you think that you can do so with borrowed money?

Though people have reached outer space and there are talks about travel to the moon for the common man, we are still unable to find ways to deflect nature’s fury when it attacks each season. Hurricanes and tornadoes rip homes apart every year; since we can’t escape them we should at least learn to mitigate our losses and keep our finances as safe as possible.

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As an honest taxpayer, you must be aware that should your property be damaged during a natural disaster you can deduct the loss incurred in your federal income tax returns, and in the event, your region itself is devasted your claims will be processed fast. You must also be aware that you can deduct only if you are not covered by insurance. Those covered by insurance must act fast and claim for reimbursement as soon as possible or your claim will become null and void.

When to deduct your losses

You can deduct a casualty loss only when your property is damaged during a natural disaster like a hurricane, tornadoes, floods or earthquake. Sometimes casualty loss also includes vandalism, theft, and fire. For the normal wear and tear and even termite damage, you cannot claim losses.

How to deduct losses

You can, as a rule, deduct losses only in the year of disaster unless your region has been declared a disaster zone. In such circumstances, you can decide when you want to deduct the loss – either the year of damage or on the returns of the previous year. Thus, for damage in 2018, you can deduct losses from 2017 tax returns and thus lower the tax for that year.

Before you deduct the loss, you must calculate the incurred loss. Follow the below steps to estimate your loss.

  • To begin with, you must be aware of the basis (the capital investment on the property) of your property before disaster strikes. For a property that you bought it will be the cost while for an inherited premise the basis determination is a little more complex. It is normally the fair market value of the property at the time of the demise of the decadent.
  • So, you can calculate your loss by deducting the difference between the fair market value after the casualty and before it.
  • You must also deduct any other form of reimbursement that you hope to get for the house either from insurance or other source and then present the final loss.
  • As a rule, you must reduce $100 on the total loss incurred after a natural disaster. You can claim $100 on any such number of a natural disaster during the year.
  • You must reduce the loss by 10% of the total annual Gross income of the taxpayer. If the loss exceeds this amount only then can you deduct it otherwise the loss is yours to bear. You cannot include loss incurred on any future profits you hope to receive on the property.
  • Fill up form 4684 to file for loss on your tax returns.

We cannot stop natural calamities nor can escape the repercussions but we can do is at least reduce our losses and hope for a more financial stability.