What Are the Differences Between A Trader And An Investor?

by khalid on 14/09/2011 · 0 comments

Traditionally, both traders and investors trade but there is a technical difference which is of prime importance. A trader is a short term investor – he looks for short term returns and is not any expert or analyst of the market. An investor, on the other hand, knows much more about the market and how it works – he invests looking for long term returns and is there to stay.

Traders mostly trade for a few days, weeks or may be a month. They are not into the game, just mere side-players while investors invest in the market for years. Where traders use trading indicators like charts and news which are pretty much short lived, investors analyze the stock and invest in stocks that provide them with much better growth and value. Another point of difference is that traders require keeping a close watch at the stocks and their market rates and keep checking the prices everyday so as to stock off to prevent losses but the investors don’t do the daily analysis because they have invested for a long term benefit and everyday ups and downs don’t matter much to them.

Temporary trading involves a lot of risks, thus the traders are much more prone to losses as compared to the investors. An investment based on solid grounds doesn’t shake up that easily and investors are not prone to much danger. As it happens, traders panic when the market experiences an unexpected high or low which doesn’t happen with the investors. In fact, they buy value stocks at the bottom price when market falls.

 

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