When it comes to stock market, a lot of people confuse the idea of trading with investment and they are two separate entities, as similar as they may both sound, there are so many factors that differentiate them.
Differentiating between an Investor and a Trader.
A lot of people mistake trading and investment, trading and investment are two different things that should not be placed together. While investors are those who buy stocks and hold on to them for a long time, traders only hold on to their stocks for a period of when they can get it off their hands, the type of trading system you choose to go into, determines how long you may have to hold on to your stock.
Investors are concerned about carefully balancing an investment portfolio amongst the growth in stock, the value of stock as well as domestic and foreign stocks. Investors are usually particular about getting a well-balanced portfolio because it generally offers a steady return that ranges between five to twelve percent, and this is usually dependent on the type and the amount of risk the investor is willing to take.
A trader however will always look for the best option to make his or her money come back with profit as soon as possible, sometimes traders switch business strategies so they can quickly make their profit as soon as possible. Traders sometimes leave the market completely while they watch out for the period when the market will become favorable and they can get back to the business of profit making.
This post will however focus more on trading than investment.
Successful Characteristics of a Trader.
Trading is sometimes much more difficult than it sounds and anyone who wants to succeed at the act must be a little hard on themselves and look beyond their natural ability.
Anyone who desires success in trading, must brace up to the fact that mistakes are certainly inevitable.
The game needs to be played with smartness and every form of emotional consideration has to be dismissed completely when handling business.
Sometimes, the highest point might be missed or even the lowest point but play safe in a way that, you will be able to sleep well at night bearing in mind that, your funds are safe.
In order to enjoy the ride in trading, traders must be aware of when to ride well and also when to jump out of the train, a trader should never get too comfortable with the rise in stock that he forgets there could be a dump anytime.
Bear in mind that the idea of trading involves lots of risk, you should never put the money you are not ready to loose into trading. Trading could be really profitable but also very risky.
Requirements Needed for an Effective Trading.
Anyone who wants to go into the system of trading, needs to get necessary facilities to run the system and those facilities include, a good computer that contains a good hardware, a good memory space and speed processor. A fast internet facility is more than necessary to start trading
