Discussion in 'Black Money Business Jobs' started by Shikamaru, Jan 31, 2012.
Anyone know the difference between investing and trading?
What is investing?
What is trading?
Investing is when you put money on a stock and wait for long term gains but trading is when u do it for shorter amounts of time say a few months vs a few years.
That's pretty good.
I look towards investing or long term appreciation.
I look towards trading for cash flow.
Investing is generally longer term. Trading is short term.
Investors can only make money when a market goes up or an asset rises in value.
Traders can make money when assets drop or rise in value.
If I am dealing in paper, one of my requirements for investing is that it must produce cash flow. No cash flow, not interested.
I really want to learn more about trading. I heard this guy talking on the radio a while back about it and said that there was a site where you can learn to do it for free? Do you have any suggestions
There is one book I recommend above many titled "Trade Your Way to Financial Freedom" by Dr. Van K. Tharpe.
That book has radically altered how I approach many things in life and not just investing/trading.
I focus more on the design, operations, and efficiency of an investing/trading system. That book above will help you do that. It is a challenging read. You'll want to read the book all the way through at least twice.
Learn all you can about investing/trading including historical as well as technical and fundamental analysis of assets and markets.
Generally speaking, trading is done for income and cash flow. Very few people can do it successfully due to how people are naturally wired.
Your investing/trading style will be unique therefore, you will need to design a system fit for you.
Here is an example of knowing the difference between investing and trading:
When you ask most people why are they in the markets, they will say to make money.
To make money, to me, implies income and cash flow.
If this implication is the case, then these people need to trade, not invest.
Investing is for long term say one's retirement as an example.
Another avenue is arbitrage.
Arbitrage is akin to financial hacking. You look for inefficiencies in a market or process in order to exploit for profit potential.
Once you get your basics down, then one can look into arbitrage.
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