In the financial market game, you basically have two choices: trading or investing. Both aim to make you some cash, but they do it in totally different ways, with different time commitments and levels of risk. Let’s break down these two approaches a bit.
TRADING
Think of trading like a fast-paced race. It’s all about speed and intensity, requiring quick decision-making skills. Traders try to take advantage of short-term price movements in assets like stocks, currencies, or commodities. It’s really short-term focused, not much about the long haul. Some traders, called scalpers, might hold onto positions for just a few seconds or minutes, trying to score small profits from minor price tweaks. Day traders jump in and out within the same day, while swing traders might hang on to their positions for days or weeks to catch those short-term market shifts.
What’s cool about trading is that it doesn’t really care about the long-term value of assets; it’s all about where the market’s headed at that moment. That’s why traders lean heavily on technical analysis, which is all about studying price charts, patterns, and using tools like indicators or the RSI (Relative Strength Index). But this intense focus on the now makes trading pretty risky, especially with market volatility. You need serious emotional control to deal with the stress of making snap decisions that could cost you big bucks in a flash.
Plus, all that buying and selling racks up costs, since brokers throw in things like commissions and spreads.
Thank you for this article.
There are people who are both traders and investors. They are able to manage and balance both and there are people who are only traders and others only investors. It is not easy do both at the same time but if that is what works for you then fine. Trading requires more skill and commitment of time and resources than investing that all you need to do is patience. I like both but on a personal level I can only commit to investing full time as I have other things taking my time.
Yeah, I'm sure there are people who balance the two where they are both traders and investors, maybe they're good at management so they're able to do it even though it's not easy.
But for me it's difficult --- not able to do both, therefore do not want to take more risk in trading especially those that use leverage, then it's better to invest with less risk, I don't even mind about patience because it's part of future profits.
Because in trading once lost more than $2000 in the past, therefore to decide to stop and not focus on trading anymore.
For now, BTC is the ultimate store of value.
May it become the ultimate coin for other things? We will find it out in the future, but its nature dictates how we interact and use it.
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.
At least if trading has been mastered in its skills then adding investment as a second choice is not difficult, especially what you said is true, investment does not take much time but only enough to buy and HOLD.
Because for me it is certain that trading will take a lot of time especially if they focus more on trading.
But the important thing is when you are able to do good management then I think it will be easy to do.
For example, a little profit from trading to BTC investment.
You can hold some BTC and then just trade the rest. This way you do both while keep learning to trade. I think everyone is doing it because not everyone is comfortable in trading their entire Bitcoin.
Trading means you still could generate small amount every time the price moves. Depends on how big you trading capital is. What is important is you learn how to master trading.
Everyone can both trade and invest, but not everyone is capable to make it for long term. Some are just good at the beginning, but after that, they realized that trading or investing is not for them. But there are really those bright and talented ones, they really are good in both.
However, one thing is certain, both involves risk towards financial growth and security. And when theres risk, that only means that those who have good risk management may have an edge and succeed, but those who find it hard to manage all of those, in reality they have no place in both trading or investing.
It is a great read.
I hope that most of the aspiring traders and investors will find this thread as soon as they search for some good to find article for reading.
While we're free to be on the both sides and no one can stop us. The trading part is actually brutal, you'll have to learn so many factors on how you'd be able to win against the traders.
With investing, knowing that bitcoin is one of the greatest asset for the past decade and probably century, the slow approach of many through DCA is what is going to save them from financial trouble in the nearest future.
I know a couple of people that have been able to successfully combine trading and investing and are doing well in both. How they do it is that the profits from their trade per month are invested into Bitcoin and other reliable altcoins. Through this approach, some of them are holding large quantities of Bitcoin. They protect their investment from the effect of wrong trading by ensuring that they do not touch their investment when they experience margin ball, instead the source for money from other areas to fund their trading account.
A lot of traders turn into investors after the coin they bought is constantly decreasing in price. Thus, not wanting to sell the purchased coin at a loss, they decide to hold it until the price returns to the purchase price. And it happens that it takes several years to do this.
Okay what if they don't make any profit from their trading during the month? Although there might be another source whereby the person that implies the both can get money from to be use for investment, but IMO don't think it's proper to hope on the profit you make from trading to be use for investment because trading is not always profitable.
As a trader you don't have to run from trading to investment and all what you have to do is to pause the trading at the time and use another funds for the investment because if you used the coins which your were using to trade for invest, it might affect you because by the time you want to go back to trading and the price at the time is very low and the time to trade at the moment is good then you will still at the losing side of the investment so it is better to do the two at the same time if there is money to balance the equation.
Thank you for this highly informative article OP. However, for us to achieve financial growth, we dont need to chose any of this that will suit to us. If we can be a good and reliable investor, then it would be easy for us to become a well-trained trader in the long run. Its actually an edge for us having these two careers in life, but these should be done with proper knowledge and guidelines on how to make them right and profitable. Consistency on learning and experience is the key. And with patience, we can do great wit them.
Investing and Trading are two pathways to improve your finance but Investing is safer and easier pathway to succeed.
Trading is more dangerous than Investing and it's not a recommended pathway to succeed in improving your finance. With trading, you can have short term profit, get it very quickly and even very high ROI but in mid-term and long-term, your ROI will be smaller a lot or even your ROI will be negative (means loss).
Trading if you choose it, is very risky so you must use stop loss order.
One of best weapons in trading.
https://github.com/SpiralDevelopment/Awesome-Crypto-Trading
https://github.com/learn-crypto-trading/learn-crypto-trading.github.io
It was great to see the post because here are some new investors or trading who want to join. This post is extremely helpful for them. Here is a very nice comparison between trading and investment. Many think trading and investing are the same thing but not in reality. If you read this post, he weill get the right idea. If you want to set the right path for yourself, the ability to help your vacation must be you investing time and attitude towards the market is very important. Although trading is risky, it gives quick profits, especially short-term market fluctuations. But it requires more time and attention and often adds to the emotional style of emotion, while investing focuses on long-term success and low-risk path. So if you want to invest long term you must have a lot of patience and gain through it usually grows slowly.
You did clear the air that both trading and investment are geared towards same purpose which is to make money and inherently different in approach. Yes, trading is far risky but quick in profit and that is one land mark for a risky adventure. If you want to aim for faster profit then trading is the angle to look towards not investment because it is a gradual accumulation either through dollar cost average or any other means you invested in but you have to wait for a certain time for it to yield profit. Like if you are hodling bitcoin during the bear season, then you need to be patient till the halving and bull season for your investment to mature for your set profit. Having said that trading is faster in both, you have to learn trading otherwise you end up losing. It requires more knowledge than investment in bitcoin which is know the time of buying, hodl until profit and sell.
I find it very hard to put the 2 side by side. Trading is quick growth at a much lower probability of success, and in my experience on this forum and in crypto trading, its the path to quick loss.
Sorry OP but I can't see any correlation for comparison. Within investing you have just so many ways as well, that has enough correlation for comparison. But trading as a way for financial growth? No man, not right.
Most people will agree with you that long term investing is safer and simpler than trading, including me. But I don't think we should be against trading for this reason and advise people to stay away from it.
Just because we don't make money and lose money in trading doesn't mean others will fail like us. Everyone has their own abilities and strengths, we should let them choose freely instead of imposing our thoughts on them. If someone likes trading and wants to make short term profits, I will support them as long as they are happy with their choices. I will not impose my thinking on them that they should choose long term investing over trading.
Hmm, thanks for a great topic for discussion, I've checked the topic on the forum ALTT, I would love to see what other think about the path the've chosen and why, currently I'm following the hybrid path there are some investments in my portfolio and some part of my portfolio is active in trading.
Such Quality topics and discussions are needed here in this particular section.