Day Trading And Investing Differences
Although many people seem to confuse day trading with investing these two are not the same. Whereas investing is done within long periods of time day trades usually buy and sell stock in much shorter time intervals. Even though it all depends on the stock a day trader does not invest in a company. They buy and sell stock with the intent of making money based on the small fluctuation in price.
Investing presupposes pre-calculated moves whereas day trading is more like speculation. Even though day trading is not quite like gambling because trades are based on specific analysis and information it is much less secure than investing. Neither the investor or the day trader base their decisions on luck.
Day traders base their buy and sell decisions on the fact that stock prices fluctuate constantly. The volatility of stock prices is what day traders depend on to make money. Conversely it is also what will determine if they will loose money. It is these daily small fluctuations that the day trader depends on to make a profit.
While a day trader is looking for relatively small returns real investors are in it for the long run and they are looking for much larger price fluctuations in stock. Investors research and buy so that their return is preferably higher than what they would get if they save their money in the bank also taking inflation in consideration.
One similarity between day trading and investing is that both require practice. You wont become a day trade nor a successful investor overnight. You will win some and loose some by practicing but you need to learn how to let the information sink in before making any big decisions about your money.
The biggest difference between a day trader and an investor has to do with time. Investors generally hold stock and assets much longer than the average day trader. Overall there is no consensus on which of the two methods generates the most returns.
Educating yourself about the techniques involved in day trading and investing is very important if you are starting out. You need to be able to spend some time and learn what is involved in the two processes. - 23217
Investing presupposes pre-calculated moves whereas day trading is more like speculation. Even though day trading is not quite like gambling because trades are based on specific analysis and information it is much less secure than investing. Neither the investor or the day trader base their decisions on luck.
Day traders base their buy and sell decisions on the fact that stock prices fluctuate constantly. The volatility of stock prices is what day traders depend on to make money. Conversely it is also what will determine if they will loose money. It is these daily small fluctuations that the day trader depends on to make a profit.
While a day trader is looking for relatively small returns real investors are in it for the long run and they are looking for much larger price fluctuations in stock. Investors research and buy so that their return is preferably higher than what they would get if they save their money in the bank also taking inflation in consideration.
One similarity between day trading and investing is that both require practice. You wont become a day trade nor a successful investor overnight. You will win some and loose some by practicing but you need to learn how to let the information sink in before making any big decisions about your money.
The biggest difference between a day trader and an investor has to do with time. Investors generally hold stock and assets much longer than the average day trader. Overall there is no consensus on which of the two methods generates the most returns.
Educating yourself about the techniques involved in day trading and investing is very important if you are starting out. You need to be able to spend some time and learn what is involved in the two processes. - 23217
About the Author:
The best thing you can do before you start investing is to speak to an Investment Advisor. You must to find someone in your area though. If you live in Toronto then you should find an Investment Advisor Toronto.
posted by X - Men @ 12:54 AM
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