No Result
View All Result
Markets
EUR/USD GBP/USD USD/JPY AUD/USD NZD/USD XAU/USD
Central Banks
FED ECB BoE BoC BoJ SNB RBA RBNZ
Brokers
Wire Transfer Visa/Mastercard Paypal Fasapay Skrill Bitcoin
FCA Cysec CFTC NFA FSA
Forex Guide
Beginners Basics Technicals Fundamentals
Education
Forex Articles Forex School Forex Terms
Trading Tools
Live Charts Economic Calendar Market Hours Fibonacci Calc Pivot Points
Forex Strategies
5 Minutes 15 Minutes 30 Minutes 1 Hours 4 Hours Daily
Resources
Indicators Forex Ebooks MT4 MT5
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
    • Ebooks
    • Indicators
      • MT4 Indicators
      • MT5 Indicators
  • Brokers
    • Deposit Bonuses
    • No-Deposit
    • Demo Contest
    • Live Contest
    • Brokers News
  • Tools
  • Login
  • Deposit Bonuses
  • No-Deposit Bonuses
  • Demo Contest
  • Live Contest
  • Brokers News
  • Brokers
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
    • Ebooks
    • Indicators
      • MT4 Indicators
      • MT5 Indicators
  • Brokers
    • Deposit Bonuses
    • No-Deposit
    • Demo Contest
    • Live Contest
    • Brokers News
  • Tools
Mira FX
  • Markets
  • Education
  • Central Banks
  • Resources
  • Brokers
  • Tools
  Latest
The Heart of Discipline July 6, 2022
Next
Prev

Investing vs Trading

Yanuar TJ by Yanuar TJ
February 1, 2021
in Article
Reading Time: 3 mins read
ShareTweetShareSendShareSend

There are some important differences between investing and trading, even though some people may use these terms interchangeably without giving it much thought of what each entails. Advantages can be found in both ways of growing your money, neither is better than the other – they have different roles.

But when it comes to growing your wealth in the forex market, trading is usually the way to go due to the unique aspects of this market.

Value ownership

Investors are concerned with acquiring the ownership of the financial instrument; they have the confidence that the instrument will continue to rise in value. They tend to “buy low and sell high”. For example, when they see that the stock price is going down, they may see it as a good opportunity to buy and own the stock ‘cheaply’so that they may profit when the stock goes back higher in the future.

Traders, on the other hand, do not have much concern with the buying and owning of the instrument. They exhibit the same ease with either longing (buying) or shortselling the instrument. Unlike investors, traders are more willing to buy ‘high’ in the hope of being able to sell even ‘higher’, or short-sell ‘low’in the hope of being able to buy back later at an even ‘lower’price.

Time frame

Investing usually entails the “buy and hold” concept, whereby an investor’s goal is to acquire a financial instrument and to hold it for medium to long term, in the hope that the instrument will rise in significant value after a certain period of time. Trading couldn’t be any more different. In trading, a trader’s main goal is to profit whichever way the market goes, whether upward or downward, within a shorter time frame. While there is short and long term trading, the holding period rarely extends beyond more than a few months or longer than a year.

Getting in

Serious investors tend to buy an instrument based on the underlying fundamental reasons. For instance, savvy stock investors will analyze the background of a company, pour-over its quarterly earnings report, assess the company’s reputation and strength in the particular industry sector, and assess the potential of its products and the track record of the management team. Traders, however, tend to look for high-probability trade setups using technical analysis as their favourite tool, and many of them also incorporate market sentiment into their trading decisions. Short- term traders are quick to recognize changing market trends, and take advantage of price swings in the market, whether in range-bound or trending environments. 

Getting out

The “buy and hold” mentality of investors tends not to deviate far from “buy and forget”, as many investors almost have zilch idea of when to get out of their investment when things do not go well. Many stock investors are left with worthless stocks as they do not have stop-loss boundaries or know when to cut their losses. While there are also many traders out there who do not have risk management rules in place, traders overall are generally more aware of proper risk management than most investors. Whether or not they translate these rules into practice is another thing altogether.

Tags: Beginner
ⓘ Some contents provide links to third-party news and current events as a convenience to you. We have not reviewed and don't endorse the contents of these sites. Please always do your own research. Mira FX does not endorse any companies, products or services which are represented on this article. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite.

Related Posts

Easy Scalping Strategies

Easy Scalping Strategies

FBS | Moving Average - H1, M5
How to Trade Ahead of the News

How to Trade Ahead of the News

FBS | Fundamentals
Business Confidence Report – Forex Economic Calendar

Business Confidence Report – Forex Economic Calendar

Mira Team - July 31 | Fundamentals
Forex Market Sessions

Forex Market is a Three Session Trading Market

EMANOEL - May 31 | Basic
audcad

Introduction The AUD/CAD Pair

JOSHUA - JAN 28 | Fundamental
The Important Role of Bank in the Forex Trading

Forex Trading is Still a Monopoly for European Banks

USER FX - Jun 11 | Basic

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

Latest

Forex Trading Psychology

The Heart of Discipline

JOANA N - Jul 6 | PSYCHOLOGY

RBA Minute: Inflation was expected 2 to 3% range in 2023

JUN 21, 2022 | RBA, AUD

BoE: Another Dovish Hike as Expected

JUN 20, 2022 | BoE, EUR/GBP

Chair FED Jerome H. Powell Welcoming Remarks

JUN 17, 2022 | USD, FED

USD/CAD looks for more upside; 1.2875 in focus

Jun 17, 2022 | USD/CAD

Italian Trade Balance – April 2022

JUN 17, 2022 | EUR
Advertisement
  • About
  • Advertising
  • Disclaimer
  • Contact
  • Privacy Policy
  • Terms & Conditions
Risk Warning: All information on this website, including any opinions, articles, charts, prices, news, data, Buy/Sell signals, reviews, research and analysis is provided as general market commentary and does not constitute any investment advice. Mira FX is not liable for any damage or loss, including but not limited to, any loss of investment, which may be based either directly orindirectly on the use of or reliance on such information. Before deciding whether or not to take part in foreign exchange or financial markets or any other type of financial instrument, please carefully consider your investment objectives, level of experience and risk appetite. Do not invest more money than you can afford to lose. Note that the high level of leverage in forex trading may work against you as well as for you. Please seek advice of an independent financial advisor if you are not fully aware about the risks associated with foreign exchange trading. Forex trading on margin involves considerable exposure to high risk, and may not be suitable for all investors. Mira FX does not endorse any companies, products or services which are represented on Mira-FX.com The information on this website is subject to change without notice.
No Result
View All Result
  • About
  • Advertising
  • Central Banks
  • Contact
  • Disclaimer
  • Forex Brokers
    • Forex Regulatory Bodies
  • Index
    • Daily Forex Strategy
    • Forex Ebooks | Language: English
    • H1 Forex Strategy
    • H4 Forex Strategy
    • M15 Forex Strategy
    • M30 Forex Strategy
    • M5 Forex Strategy
  • Markets
    • EUR/JPY
  • Mira FX
  • Privacy Policy
  • Terms & Conditions
  • Tools
    • Central Bank Calendar (2022)
    • Economic Calendar
    • Fibonacci Retracement Calculator
    • Live Charts
    • Market Hours
    • Pivot Point Calculator

© 2022 Mira FX | Copying of materials is allowed only with the presence of an active link to a source page.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In