Investment Vs Trading

Investment is for those people who have more patience and whereas trading is for those who look for excitement while trying to earn a profit. Any type of valuable asset like stocks, commodities, currencies can be held for long-term or it can be traded immediately within a short span of time to earn a profit.  The biggest difference between investment and trading is that how much longer one wants to hold on to his asset.

Investment

People who prefer investments are patient and are ready to wait for years to earn their return on investment. It is idle for people who are not willing to take a risk and wants their investment to grow in time.  Their money won’t double overnight; it takes years to earn a return.

Trading

In the case of trading, people hold the assets anywhere between few seconds or minutes to weeks.  In the last few years, we have seen an exponential growth in the field of trading, thanks to the growth in technology and more people entering the market. Now there are high-frequency traders who will hold the position of the assets only for a fraction of second.  Few of these high-frequency traders use the help of automated trading software like bitcoin loophole. You can learn all about on the website. They help in faster transactions and the decisions are taken immediately. There is no wastage of time.

Trading strategies

Momentum traders- These traders look for those assets which will make the major move down or up and have high trading volume. They hold on to the asset till the price reaches the pre-set level. It might take just a few minutes or it will take an entire day.

Technical traders- The technical traders are on the lookout for trends or patterns in bond, stock, currency charts, etc.  Then they conduct the similar transactions based on what had happened earlier during the same pattern time in the past.  They do not have much idea about the assets they are holding, they take decisions only on the basis of how the chart looks like.

Fundamental traders- These traders conduct transactions on the basis of asset’s fundamentals like profits, debt levels, and earnings.  The fundamental traders will sell or buy the asset based on the upcoming earnings report of the organizations or if there is any anticipated acquisition.  Since the change in organizations fundamentals takes time, these traders hold the position for several days or at times many weeks.