Trading vs Investing Let’s see who wins 🤫
Contents
What is trading?
Buying and selling of stocks, commodities, equity, etc for a few hours or a couple of days is known as trading in the stock market.
For whom is trading required?
Trading is not a bad option if somebody wants to make money. But trading is not for everybody some of the following points are needed if somebody wants to be a trader.
- If the person has good control over their emotions can do trading.
- If the person is ready to take a risk then he or she is welcome in trading.
- There is a high probability that you lose all your capital in trading so if you have that capacity then you can try your hands in trading.
- If you want to make a regular income from trading you can do it.
- But there are lots of ups and downs you must have a good command of technical analysis to make money.
What is investing?
If you have some extra money in your bank and you think that you want to grow that money so you can put that money in the stock market or any other business this is basically what we called as investing. We do invest to grow our capital over a longer period of time.
Why investing is important?
Some of the important points are discussed below 👇🏿
- Investing helps you to grow your money
- Investing not only helps you to grow money but it also helps to create a huge amount of wealth in longer period of time
- If you are a beginner you can start investing, investing don’t require as much learning as it is required in trading
- Investing is less risky as compared to trading
- If you have less capital then also you can start your investing journey
Difference between trading vs investing?
| Trading | Investing | |
| 01 | Trading is riskier | Investing is less risky |
| 02 | Trading is a little bit tough to learn | Investing is easy to learn |
| 03 | Technical analysis is required in trading | Fundamental analysis is required in investing |
| 04 | More capital is required in trading | Less capital is required in investing |
| 05 | Trading is for short term | Investing is for long term |
| 06 | More trade is required in trading | Less trade is required in investing |
| 07 | In trading, one has to buy and sell | In investing one has to buy and hold |
| 08 | In trading, we have to see profit and loss | In investing we have to see dividend and capital gains |
| 09 | Trading is not for everyone | Investing is for everyone |
| 10 | But the reality is that traders are not valued | Investors are highly valued |
| 11 | In trading, there is a high chance of losing capital | In investing there is a low chance of losing capital |
| 12 | In trading, a profit mindset is there | In investing, a growth mindset is there |
Who earns more money in trading vs investing?
Here is to scenario the first one is if you see for the short term there is a high probability that in trading the person earns more as compared to investing and the second scenario is that if you see for the long term there is a high probability that in investing the person earns much more than in trading. The reason why I said the person investing will win in the long term is just because of the power of compounding it helps to create magic for that person who is investing for a long time.
What is riskier trading or investing?
Well, the risk is everywhere. You can’t say that things don’t have any risk. Everything in the universe has a certain amount of risk whether it may be high or low but it will be so when if you see trading there is a little bit of high risk in trading if you compare it with investing. Hope you got it.
FAQs
Which is better trading vs investing?
Both are better in their situation. You can’t say anyone wrong. Both have their own way of creating money.
Well now you know trading vs investing now it’s time to know some personal finance rules.
If you like don’t forget to share because sharing is caring and comment below do you have any queries regarding personal finance. I will try to make an article on that particular topic.