|
Nowadays, it has become very common to confuse between the investors and traders. The media tends to refer to traders as investors by making statements like, "Investors lose x millions in market crash" or "Investors become rich by y billions in the market rally." In fact, the people they are referring to here are traders and not investors. Here is the major difference between the two: Investors follow the principle of buy and hold; meaning they buy the shares and hold them for a substantial period. On the other hand, traders use the principle of buy and sell meaning they buy and then sell off the stocks immediately. So this group of people is most severely affected when the markets move up and down sharply. Now the question is: Is trading a better option than investing? Do traders make more money than investors? The answer is No. While making quick money attracts many, it is the most dangerous way to make money in stock markets, since trading is nothing short of gambling. The only people who make money in stock trading are the ones who can devote their full attention to this task. They have the necessary traits like risk taking ability, time, discipline and monetary resources to do this job as a business. But all this is not needed for investment. You can buy good quality stocks and hold them for a long time. Though stocks may crash in the short-term, over the long haul they move in only one direction -- up. So you can be sure that over the long term, you'll end up making money. Another difference is that the traders attempt to time the market. They normally sell when they think the stock has reached its peak value. But in reality this may not be true. The stock price may appreciate still further, and thus in the process will end up losing further price rise. Similarly, they will buy when they think the stock has bottomed out, but the market can fall further, thus causing losses to the traders. But in case of investors, timing the market is necessary. They know the secret to stock market success: The time is the market is more important than timing the market. Research has shown that those who trade have a higher likelihood of losing their money than is higher than those who invest for a long term. Traders tend to follow technical charts, which can be quite confusing for a novice in the market. But investors follow scientific investment strategies like value investing that ensure they get good returns on their investment. Moreover traders operate on the basis of tips given by the brokers. These tips have no scientific basis and most of the times are given by the brokers, who are hand-in-glove with the unscrupulous company management. Their intention is just to collect money from the gullible public and boost their company's profile. Then the traders find that the stock price has crashed to its previous levels. On the other hand, investors use research reports t take their investment decision. So it is always advisable to be an investor instead of trader, unless you have time and resources to do trading. The market is not for everyone. But those who can make it work can rake in the profits. Find out about UFX Bank. Also make sure to visit HY Markets Trading Platform for your trading needs.
Related Articles -
investors follow, stock market, investors follow scientific, traders tend, moreover traders, traders find,
| 
