Na di 2 ways to Financial Growth: Trading vs Investing

[Agbe]

I no 2 use local language for am and na only di 1st sentence. But you go enjoy am and like am.

When we come 2 di financial markets, weti dey be say either di path of trading or investing. Both strategies na 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.

Na di main board own bi dis Two Paths to Financial Growth: Trading vs Investing

[Charles-Tim]

1.With trading, there is potential for traders to generate significant returns in a short period of time by capitalizing on market volatily

This is true in theory but not true in what is happening in real life. Almost or more than 90% of traders are losing. This is the reason the con is what that is actually more true about trading.

I see trading as impatience means of chasing for money and that is where the loss will start.

[Mia Chloe]

~snip

One thing you will actually understand when you get more familiar with trading is that many profitable Traders actually investors too. One thing most people fail to understand is the concept of investments. Basically the fact is you need capital to invest.

I think this is where the relationship becomes obvious. Trading is actually a massive source of income and liquidity to use for investments depending on how good you are.

[Mate2237]

This is one of the quality posts in this local board and the forum at large. In the other forum, many people don't know dis things. Investment get long term and short term. If someone keeps money for somewhere for one year and him get profit foram, na investment be that. And no bi only when you invest foe years before we go know say we dey invest.

Everyone know say trading na risky something wey person no just go or enter but knowledge is needed. And trading and investment na two different things we no even related.

[Asiska02]

~snip

One thing you will actually understand when you get more familiar with trading is that many profitable Traders actually investors too. One thing most people fail to understand is the concept of investments. Basically the fact is you need capital to invest.

I think this is where the relationship becomes obvious. Trading is actually a massive source of income and liquidity to use for investments depending on how good you are.

Well said, trading is a very good way to make quick money to invest but it is very hard to come about. When greed and impatient are involved, it makes it hard for many people to make that big money to use for their investment purposes. They are interrelated but it is not something that can be achieved easily, so taking time to make it achievable is worth it at all costs.

[Nheer]

~snip

One thing you will actually understand when you get more familiar with trading is that many profitable Traders actually investors too. One thing most people fail to understand is the concept of investments. Basically the fact is you need capital to invest.

I think this is where the relationship becomes obvious. Trading is actually a massive source of income and liquidity to use for investments depending on how good you are.

Well said, trading is a very good way to make quick money to invest but it is very hard to come about. When greed and impatient are involved, it makes it hard for many people to make that big money to use for their investment purposes. They are interrelated but it is not something that can be achieved easily, so taking time to make it achievable is worth it at all costs.

not a only very quick way to make money but also a very easy quick and fast place to lose money lol. But trading is really a enjoyable activity if one is knowledgeable enough and ready enough to strategize the market and place a entry but with out knowledge trading will be very difficult and a easy place to lose you money or your capital getting swept. Trading can be enjoyable and profitable place to make money when you have the knowledge it will really be a perfect place to get profitable but without knowledge you will a profit to the market lmao. Knowledge is the key both trading and many other activities that will make you profitable.

[Azharul]

If we want to growth our financial asset, we should follow some important rule in cryptocurrency world . I think that trading and investment is also the best two way for earn best profit from cryptocurrency market. But we should remain a best trader or investors could be earn best profit from crypto currency market. Because a professional trader who has a sufficient knowledge from cryptocurrency market. But when we start to invest or trade, we must understand in cryptocurrency market, which will be best helpful to earn best profit from trading and investment. So i believe that acquire knowledge of crypto currency trade or investment could be reach best success for a trader or investors.

[Mia Chloe]

If we want to growth our financial asset, we should follow some important rule in cryptocurrency world . I think that trading and investment is also the best two way for earn best profit from cryptocurrency market.

Yes I agree with the fact that you can start up small Investments but the problem is the ROI on Investments like that is way to small for you to be able to outstand inflation and still be in proper profit. This is the reason why you see people don't think much about investing until they have a huge amount of funds relative to what they intend investing on.

Trading is a way to grow capital but a similar problem it has with investing is that it also takes time to build or grow in. Many people want to skip the growth process so they end up losing and calling trading a scam.

[Mr. Allcrypto]

1.With trading, there is potential for traders to generate significant returns in a short period of time by capitalizing on market volatily

This is true in theory but not true in what is happening in real life. Almost or more than 90% of traders are losing. This is the reason the con is what that is actually more true about trading.

I see trading as impatience means of chasing for money and that is where the loss will start.

Well atleast you saying the truth because I literally don't believe all this whole shit show traders actually put out online about making it huge within no time of trade because for me it's all just a mirage to actually kinda lure more people to either their channel and make money off them or certainly lead more impatient people to actually lose more money despite the fact that they too themselves are on the losing end.

[Azharul]

If we want to growth our financial asset, we should follow some important rule in cryptocurrency world . I think that trading and investment is also the best two way for earn best profit from cryptocurrency market.

Yes I agree with the fact that you can start up small Investments but the problem is the ROI on Investments like that is way to small for you to be able to outstand inflation and still be in proper profit. This is the reason why you see people don't think much about investing until they have a huge amount of funds relative to what they intend investing on.

Trading is a way to grow capital but a similar problem it has with investing is that it also takes time to build or grow in. Many people want to skip the growth process so they end up losing and calling trading a scam.

Actually, i think that you could express a best opinion in your comment. I also believe that trading is also a best profitable source for earn huge profit from cryptocurrency market. But if we want to avoid losing process and trading scam we should understand in cryptocurrency market carefully. Because i believe that a professional trader must observe trading system clearly. So i think that when we want to trade or invest in cryptocurrency market carefully observe will best important for us.

[Obim34]

If we want to growth our financial asset, we should follow some important rule in cryptocurrency world . I think that trading and investment is also the best two way for earn best profit from cryptocurrency market.

Yes I agree with the fact that you can start up small Investments but the problem is the ROI on Investments like that is way to small for you to be able to outstand inflation and still be in proper profit. This is the reason why you see people don't think much about investing until they have a huge amount of funds relative to what they intend investing on.

Trading is a way to grow capital but a similar problem it has with investing is that it also takes time to build or grow in. Many people want to skip the growth process so they end up losing and calling trading a scam.

Actually, i think that you could express a best opinion in your comment. I also believe that trading is also a best profitable source for earn huge profit from cryptocurrency market. But if we want to avoid losing process and trading scam we should understand in cryptocurrency market carefully. Because i believe that a professional trader must observe trading system clearly. So i think that when we want to trade or invest in cryptocurrency market carefully observe will best important for us.

One thing about trading is the risk tolerance, it might not be disturbing for people who may claim to be experts(know the charts and analysis too well) to endorse as a good extra source of making profits.

What makes investors consider trading a suicide is due to its strict conditions attached, demanding greater knowledge of expertise even with all that, there is still levels to where you lose money while trading, unlike a person who invests and rather sits to wait for the price to climb higher than was purchased. 

[Azharul]

If we want to growth our financial asset, we should follow some important rule in cryptocurrency world . I think that trading and investment is also the best two way for earn best profit from cryptocurrency market.

Yes I agree with the fact that you can start up small Investments but the problem is the ROI on Investments like that is way to small for you to be able to outstand inflation and still be in proper profit. This is the reason why you see people don't think much about investing until they have a huge amount of funds relative to what they intend investing on.

Trading is a way to grow capital but a similar problem it has with investing is that it also takes time to build or grow in. Many people want to skip the growth process so they end up losing and calling trading a scam.

Actually, i think that you could express a best opinion in your comment. I also believe that trading is also a best profitable source for earn huge profit from cryptocurrency market. But if we want to avoid losing process and trading scam we should understand in cryptocurrency market carefully. Because i believe that a professional trader must observe trading system clearly. So i think that when we want to trade or invest in cryptocurrency market carefully observe will best important for us.

One thing about trading is the risk tolerance, it might not be disturbing for people who may claim to be experts(know the charts and analysis too well) to endorse as a good extra source of making profits.

What makes investors consider trading a suicide is due to its strict conditions attached, demanding greater knowledge of expertise even with all that, there is still levels to where you lose money while trading, unlike a person who invests and rather sits to wait for the price to climb higher than was purchased.

Actually, your opinion is very prefer in this time. I also believe that trading is one of the best difficult process and also be risky. So in this situation we know that many crypto lovers select investment way for earn best profit from cryptocurrency market. Because we know that crypto currency market is always depending on up and down. So in this situation trading system will be very risky. So in this situation we can select investment, but if we want to invest bitcoin or others crypto we should understand clearly for crypto currency market situation. I think that then we can be success from crypto currency trading or investment.

[Sim_card]

1.With trading, there is potential for traders to generate significant returns in a short period of time by capitalizing on market volatily

This is true in theory but not true in what is happening in real life. Almost or more than 90% of traders are losing. This is the reason the con is what that is actually more true about trading.

I see trading as impatience means of chasing for money and that is where the loss will start.

I agree with you. People don't want to take their time wto build and grow the normal way but they want a short cut to riches. There's no short cut to riches but to losses because success takes a long time to achieve it. The OP made trading look simple. However, in theory, trading is simple.

[DragonF]

Only when a trader or investor has a thorough understanding of trading or investing can these activities contribute to financial growth. Some people enter the trading industry without having a thorough understanding of the specifics, which results in them losing money rather than making money. Before starting to trade independently, I suggest that novice traders work with an expert to understand the tactics required to make profitable trades.

Investing is no different. It is not a good idea for someone to invest in a business if they do not have the knowledge to see it through to success. People make the error of starting an investment and then hiring professionals to oversee it. Even though it might not be a bad thing, it implies that the owner will be at the messy of the experts because he lacks knowledge.

[Mia Chloe]

What makes investors consider trading a suicide is due to its strict conditions attached, demanding greater knowledge of expertise even with all that, there is still levels to where you lose money while trading, unlike a person who invests and rather sits to wait for the price to climb higher than was purchased.

+1
Actually the truth is frankly speaking there are not many profitable Traders out there and what actually makes the profitable ones stand out from the non profitable ones is not only capital but also a valid analysis or strategy that works with them.

This is even where the biggest problem is because many people that try to venture the forex market are not patient enough to understand the core properties of that particular strategy that they use so they back down after they bag a few losses.