On Different Trading Styles & Investing!

Sriram Balasubramanian
5 min readJan 9, 2022

Know the difference and choose what’s best for you!

Source: Author @ www.wibe.school

When it comes to the stock market, commodities, or any other asset class, there exists two major market participants:

  1. Traders,
  2. Investors.

Of course, the third category is those speculators, and the write-up is neither for them nor about them.

Both Trading & Investing are profitable as long as the skill and the required mindset are regularly honed. In this write-up, let’s look to understand the difference between trading and investing.

Difference between trading and investing arises due to the time frame of the assets or positions held. It could be anything from a few hours and then days, months, years, or even a few decades.

Let’s take a real estate property as an example. Most Investors hold real assets over a few years, if not some decades. None will flip a property within a few hours or days, as is the case for stocks or other digital assets.

Timeframes:

Scalping & High-Frequency Trades:

High-frequency trading or manual scalping is usually done within a few seconds to minutes and is probably a high-risk strategy if not equipped with live data feeds and direct broker access. Scalping is based on assuming that most stocks will complete the first movement stage. But where it goes from there is uncertain. After that initial stage, some stocks cease to advance, while others continue advancing. Scalping is to be executed if we have a clear profit target contrary to other trading or investing styles where the profits are let to run. A series of minimal gains aggregate over time to make it high enough, but enormous stress and effort are equally required to sustain such gains.

Day Trading:

Simply put, day trading is flipping assets within the same day to secure minuscule profits. Day traders buy a stock anticipating an increase or decrease in asset price, relying on technical indicators to profit in the short term. Once the profit targets are achieved, the positions…

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Sriram Balasubramanian

Building WIBE to enable people to trade stocks to generate consistent cash flow. I enjoy writing on Wealth of all types!