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What are the difference between trading and investing?Back

Everybody wants to earn money from their saving money. For earning they try in different-different sectors like Stock market, Mutual Funds, PMS, Bonds, currency, properties, bonds etc.


What is investing: Investing is a method refers to buying a stock for a longer period, which will invest for 2-3 years or more. The prediction is based on fundamental factors, such as earning reports, dividend etc. but some investor use bigger time frame chart on Technical Charts like weekly or monthly chart. The goal of investing is that to build your wealth by investment for a longer time period.


What is trading: Trading in different from investment, this type of people frequently buying and selling their stock or commodity for intraday / short term. They use technical charts for trading in stock market. In technical they apply price action, patterns, indicators / oscillators for swing or short term trading. Also this type of trader always reading world market news. Swing trader trade on reversal pattern, doesn’t matter the trend is in upside or downside. Scalping is also part of swing trading but this type of trade wait few minutes for his targets. Day trader is also king of trading they do trade everyday but square off each position before market close. They don’t care whether he is in profit or loss. This type of traders often choose their trading style based on factors including: account size, amount of time that can be dedicated to trading, level of trading experience and risk ratio.


The funniest thing is that both investors and traders seek profits through market participation. In investors seek larger returns on longer period through buying and holding. Where the Traders, by contrast they take advantage of both rising and falling markets to enter and exit positions over a shorter timeframe. They trade frequently both side.

Posted on: 22-Nov-2016 | Posted by: NIFM | Comment('0')
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