Choice Investing or Trading

By IanM 26 Nov, 2022 Post a Comment

Perhaps you may have to ask me what is the difference between investing and negotiating, or perhaps you could ask you, "Am I an investor or a trader?", Or maybe you may have realized that he There is a difference in the first place. In this article, I will explain the difference between investment and negotiation.

The definition of its most basic form is as follows:

"Investment is the attempt to make money over a long period of time"

"Trading is the attempt to make money on a short period"

Now, the question is: "How long does a long time last and what is the short period of time?" The answer is: "It's up to you to decide!"

What does it mean? This means that you could consider that 6 months to be a long time to keep a stock, so you will call this by investing, and someone else could consider 6 months a very short time and they will call negotiation.

But for reasons of uniformity, we will adopt the following rule:

"If the duration between the opening and closing of a transaction (that is, the purchase and sale of security) can be measured in days or weeks, it is a matter of negotiating, And if the duration can be measured in months or years, this invests ".

Trade:

Usually, traders are interested only in examining the security table of security or a specific currency (generally chandon graph), they seek identifiable schemes or areas of supply and demand to determine their point of entry , and they do the same thing to determine their release, they stay in a transaction for any duration between a day (or less) and a few weeks, they are closer to the market on a daily basis, to check if their exchange is Always valid or if it's time to close it.

To be a trader, you must be very familiar with a technical analysis, as well as updated on market conditions and future events that are subject to change these conditions.

For example, if a company has "quarterly earnings report" that come out in a few days, you may want to keep a close eye on this subject, or as an opportunity to enter a business or maybe close a Nobody already open.

Merchants can be either "scalpers", "day traders" or "swing traders".

Open scalpers and close a transaction very quickly, in seconds or max minutes, looking for small profits, but they perform dozens if not hundreds of such trades a day.

Day traders occupy their positions longer than scalpers, but they never keep busy trades for the next day, they close all before the end of the day.

Swivel traders contain their positions for days or weeks.

Determine the type of trader you are very important for your success. It is very important to be honest with yourself, there is no good or bad style, everything depends on your personality, the trading style you adopt must match the type of personality you have, otherwise You will live in conflicts and this can only be damaging for your trading account.

Invest:

On the other hand, investors are strongly based on fundamentals to decide whether to buy or not, and while traders can make money in a rising or descending market, investors can only make money when the Price increases because the decision of an investor on investment or not in XYZ is based on the fact that it believes that this company will develop and develop in the coming months or years. If so, it will buy actions in it.

So, how do investors decide to know which business to buy actions?

As I mentioned earlier, they rely on fundamentals. What does it mean?

This means that they read the financial statements published by this (quarterly and annual), and they try to discover as much as possible in the internal operations of this company, about the management of their future plans, their competitors. . Basically, they try to see how healthy society and if there is a place for growth. This is called investment value.

These are the type of fundamentals that investors want to evaluate a potential investment.

Investors do not really care about small daily fluctuations in the price, they believe that if a company has a high intrinsic value, then the price of the action will follow in the long run. They are trying to buy businesses that have a high value and sell at a favorable price.

I hope this article clarified the difference between investment and negotiation.

On a personal note, I think every Wana-be-negative or investor should make a very thorough self-assessment to find out exactly what type it is, and what are its strong suites that will be critical to choose your style.

For more information on investment and exchanges, you can visit http://www.investissement-education-diar.com