Two Paths to Financial Growth: Trading vs Investing

[Agbe]

When it comes to the financial markets, what lies ahead is either the path of trading or investing. Both strategies are geared towards making money, but are inherently different in their approach, time investment and risk. To make it easier for you to decide what may be the best path, let’s look into each of these professions individually.

TRADING
Trading is often likened to a high-speed race. It’s quick, intense, and calls for quick decision making. Traders seek to capitalize on short-term price fluctuations in assets such as stocks, currencies, or commodities. Trading is mostly about the short term and rarely about long term. Some traders, known as scalpers, hold positions for just seconds or minutes, aiming to profit from tiny price changes. Day traders buy and sell within the same day, while swing traders may hold positions for several days or weeks to capitalise on short-term trends.
Trading cares less about long-term asset value and more about the direction of the market right at the moment. This is the reason traders strongly rely on technical analysis, which is basically the study of price charts, patterns, and the use of tools like indicators, RSI (Relative Strength Index), Candle stick pattern, etc making traders prone to market volatilily which makes trading risky. Traders need strong emotional discipline to handle the heat of making split-second trading decisions that can lose them thousands of dollars in the blink of an eye.

Additionally, frequent buying and selling lead to higher transaction costs, with brokers including things like commissions, spreads, and fees which can eat into profits. These costs can add up quickly, making it essential for traders to factor them into their strategies. There is long term and short term Traders and short term Traders are more than long term Traders. More details as you read further. Crypto Trading is much more riskier than Fiat Trading because of  it volatile nature. Crypto is unpredictable currency, mostly bitcoin while fiat currency is stable currency so traders in bitcoin can't predict the nearest outcome of the market.

Pros of Trading
1.With trading, there is potential for traders to generate significant returns in a short period of time by capitalizing on market volatily
2.Traders can easily adapt to market changes and switched between different assets and strategies as they rely mostly on technical analysis
3.Unlike investing, which relies mostly on price appreciation, trading allows for profit in any market direction. This means that even in a bullish market, traders can sell, profiting from liquidity grabs (retracement) before trend continuation.
4.In trading, there is availability of leverage (borrowed money) which can amplify traders return in a successful trade.
5. They used risk management tools like Take Profit and Stop Loss (TP/SL).

Cons of Trading
1.Trading is riskier than investing because the market is basically engineered to prey on traders. Short term positions are vulnerable to stop hunts, fake breakouts and liquidity grabs
2.Trading requires significant time and effort because traders need a deep understanding of market dynamics to monitor market conditions and actively manage trades and also stay updated on news and events that will likely impact the market.
3.The fast-paced nature of trading can take a toll on traders emotions. FOMO(Fear Of Missing Out) and greed can cloud judgement and lead to impulsive actions.
4.While leverage can amplify potential profits, it also amplifies potential losses.

INVESTING
If trading is a sprint, investing is more of a marathon. A more deliberate path to wealth, a slower path, focusing on your long-term story(the bigger picture) than hoping for a giant one-off windfall.
Investing is always about the long term. Investors purchase assets like stocks, bonds, or real estate hoping they will rise in value with time often through the sheer power of basic math: compounding. They are willing to wait years or even decades making asset owners generally less exposed to market swings and so lower risk than trading. Value investors look for stocks that are undervalued, growth investors look for stocks with high growth potential, whereas dividend investors aim stocks with regular dividend payouts.
Investments rely heavily on fundamental analysis to make decisions and they do so by digging into a company’s financial statements, evaluating its management team and it’s position withing the industry.
Contrary to trading, investors are less likely to come under pressure. What they need is patience as they know that markets will inevitably experience ups and downs.
 Lastly, Investment requires less transactions which automatically leads to lesser fees thus making investment a cost effective option for low risk takers.

Pros of Investing
1.Investing is less risky when compared to trading as it focuses more on long-term growth without fear of market volatility.
2.Investing requires less active management than trading.
3.Most investments, such as dividend-paying stocks and bonds, generate passive income streams, providing a steady flow of cash.
4.Many investments, such as dividend-paying stocks and bonds, generate passive income streams, providing a steady flow of cash.
5.Profits from investments are typically taxed at a lower rate than ordinary income.

Cons of Investing
1.Investing typically generates slower returns than trading, as it relies on long-term growth rather than short-term price fluctuations.
2.While investments are considered more stable over trading, they're not completely free from the risk of losing value when overall market conditions are poor. Investors endure prolonged drawdowns, while traders can profit from both rising and falling markets.
3.Investing involves little to no leverage which can reduce potential returns when compared to trading.

Conclusion:
Bitcoin being a digital currency in the world has been used in the trading field for a very large scale but seconded to the US dollar in general. But from the perspective of the youth, bitcoin is the highest trading currency digitally. The profit is depends on the mathematical calculation of the trading. Mostly the tools.

Investment in the area of store of value Bitcoin is the highest even more than the US dollar because it is volatile and US dollar is stable coin. But it is the longevity of the investment that determines the investor's profit. You can still make profit within a short period of time but it will not huge as the long term investment.

Unlike the fiat that relies on the central bank and governments for its stability, Bitcoin is decentralised and independent on control which is both it's strength and its weakness. investors also used DCA tool to lessing their burden/heavy investment at once.

My Thread in the other forum Two Paths to Financial Growth: Trading vs Investing

[SmartGold01]

This two depending on the individual purposes and likeness and I could decides to invest and have peace of mind without me facing that hard time to keep speculating and analyzing the market that regularly unlike those who could be doing trading, which implies that they can segment themselves to either daily, weekly or monthly and these are how they positioned themselves within the various moment depending on how their schedules are that is why some people preferred doing investment over trading but though both can be profitable but depends on how good you could be while trading.

[bitmover]

Every good investor says something like this:



You can try trading, but the real money is in waiting

[SamReomo]

You can try trading, but the real money is in waiting

Trading is quite lucrative as well but only for the ones who can control their emotions and for the ones who have patience. A good trader can earn so much money in short time period and that's a fact but similarly a weak hand trader can lose hundreds of dollars within a day.

[Hamza2424]

You can try trading, but the real money is in waiting

Trading is quite lucrative as well but only for the ones who can control their emotions and for the ones who have patience. A good trader can earn so much money in short time period and that's a fact but similarly a weak hand trader can lose hundreds of dollars within a day.

This is why it is always recommended to the new traders that they should not fall for the short term gains, and better up scale their skills in the risk management, charts and other analysis plays a 30% of role in a successful trade the rest is based on the risk management, including the emotional control and strategy execution.

[bitmover]

You can try trading, but the real money is in waiting

Trading is quite lucrative as well but only for the ones who can control their emotions and for the ones who have patience. A good trader can earn so much money in short time period and that's a fact but similarly a weak hand trader can lose hundreds of dollars within a day.

I agree people can earn money trading. But even good traders lose money some times

In the end it is a matter of personal preference , but usually people make more money in holding good assets.

[Themepen]

This two depending on the individual purposes and likeness and I could decides to invest and have peace of mind without me facing that hard time to keep speculating and analyzing the market that regularly unlike those who could be doing trading, which implies that they can segment themselves to either daily, weekly or monthly and these are how they positioned themselves within the various moment depending on how their schedules are that is why some people preferred doing investment over trading but though both can be profitable but depends on how good you could be while trading.

You are right that investing can give people peace of mind because it usually means holding onto something for long time and not checking on it all time. This can be good for people who do not want to think about it too much or do not have a lot of time to look at market. If we see other side trading means being more active and paying attention to market a lot which can be done every day week or month. Both investing and trading can make money but key is being good at understanding market no matter which way you choose. At end whether someone chooses investing or trading depends on what they like how much risk they are willing to take and what they want to achieve with their money.

[SmartGold01]

This two depending on the individual purposes and likeness and I could decides to invest and have peace of mind without me facing that hard time to keep speculating and analyzing the market that regularly unlike those who could be doing trading, which implies that they can segment themselves to either daily, weekly or monthly and these are how they positioned themselves within the various moment depending on how their schedules are that is why some people preferred doing investment over trading but though both can be profitable but depends on how good you could be while trading.

You are right that investing can give people peace of mind because it usually means holding onto something for long time and not checking on it all time. This can be good for people who do not want to think about it too much or do not have a lot of time to look at market. If we see other side trading means being more active and paying attention to market a lot which can be done every day week or month. Both investing and trading can make money but key is being good at understanding market no matter which way you choose. At end whether someone chooses investing or trading depends on what they like how much risk they are willing to take and what they want to achieve with their money.

Of course people may not understand how important investment is because investment gives a reliability and um a peace of mind while holding the coin could be bitcoin or altcoin that is reputable in the market.
Investment should have another means of supporting it than relying on that particular investment which they would never have that experience to hold for long instead it could pushes them to sell off their investments as quickly as possible.

[Rruchi man]

Like I said in another forum, it will be easier if the individual first commits to starting one first before trying to add another one. If the person already has some skill in trading and decides to add investment on top of it, doing both will not be so difficult because investment basically is not as skill or time demanding as trading, especially when there is no other commitment taking one's time.
It will be hard when one tries to do both, especially trading when they have other things taking their time already.

[jeraldskie11]

Like I said in another forum, it will be easier if the individual first commits to starting one first before trying to add another one. If the person already has some skill in trading and decides to add investment on top of it, doing both will not be so difficult because investment basically is not as skill or time demanding as trading, especially when there is no other commitment taking one's time.
It will be hard when one tries to do both, especially trading when they have other things taking their time already.

If we compare trading with investing, there is a big difference. It is harder to make money in trading because the risk is higher. So if you are a good trader, you can combine investing with it because it is not that difficult to learn investing. But if you are only investing and then want to combine trading with it, you will have a hard time making money here, especially if you are new to trading.

[Findingnemo]

Trading can be a good side hustle for many people but I won't suggest it as a way of achieving success in our financial status because it's high risky and similar to Gambling. I don't remember anyone constantly making profits by doing trading and crypto is highly volatile so it will be like a swing and miss on most cases.

On the other side, investment is gradual and long term plan so anyone can start investing as much as they can and now they don't need a middle men like stocks investment.

[Mr. Magkaisa]

Every good investor says something like this:



You can try trading, but the real money is in waiting

         -      That quote is true, I also believe it, you see that there are more losers among those who frequently conduct trading activity than long-term holders who invest in the cryptocurrency industry and I know you see that. Especially among those who frequently enter futures trades.

Then there are also many who have witnessed long-term holders who have made profits in bitcoin and other top altcoins in this crypto trading business.
Look Michael Saylor, Elon Musk, at others.

[milewilda]

This two depending on the individual purposes and likeness and I could decides to invest and have peace of mind without me facing that hard time to keep speculating and analyzing the market that regularly unlike those who could be doing trading, which implies that they can segment themselves to either daily, weekly or monthly and these are how they positioned themselves within the various moment depending on how their schedules are that is why some people preferred doing investment over trading but though both can be profitable but depends on how good you could be while trading.

You are right that investing can give people peace of mind because it usually means holding onto something for long time and not checking on it all time. This can be good for people who do not want to think about it too much or do not have a lot of time to look at market. If we see other side trading means being more active and paying attention to market a lot which can be done every day week or month. Both investing and trading can make money but key is being good at understanding market no matter which way you choose. At end whether someone chooses investing or trading depends on what they like how much risk they are willing to take and what they want to achieve with their money.

Of course people may not understand how important investment is because investment gives a reliability and um a peace of mind while holding the coin could be bitcoin or altcoin that is reputable in the market.
Investment should have another means of supporting it than relying on that particular investment which they would never have that experience to hold for long instead it could pushes them to sell off their investments as quickly as possible.

All matters about someones preference when it comes to this on which we know that it will really be that important that you do really know on what you are really that indeed doing specially on dealing with both things that requires proper knowledge and skills or simply having those awareness on how it works. When it comes on being a good choice then btoh are that best it is are ally just that on depending on which one is really that you do really want and havin that risks tolerance and something on which that fits up tino your risksmanagement or something that you would really be that able to make yourself that do able to handle out things accordingly but we do know that its never been that so easy on dealing up with these things.

[Wiwo]

Every good investor says something like this:



You can try trading, but the real money is in waiting

That is to say that investors that just buy assets like Bitcoin and wait for a long period are most likely to make real money and with fewer risks, so sure trading can be advised they be a fast means to make much money, but note also that trading comes with a lot of risks and that is why holding and waiting is to best option considering the level of low risks that come with holdings.

So generally investors already know the prone and corns in all the aspects of making money from their investments and also are very aware of the risks that are associated with all those options.

[taufik123]

-snip-
On the other side, investment is gradual and long term plan so anyone can start investing as much as they can and now they don't need a middle men like stocks investment.

But one also needs to know what they are investing in, what the platform is, because there are a lot of unlucky people who get into obscure investments or even scam coins if we talk about investing in crypto.

It takes some education early on about what investments are safe to make, such as Bitcoin by making purchases gradually and for the long term it is still very safe, but of course there will be risks for each.