Both trading and investing are ways to earn extra, passive income when your money works for you, bringing you even more money.
- Purpose
Investing is a long-term investment for several years.
Trading is a short term investment lasting from a few seconds, days, maximum weeks in order to receive maximum profit.
- Analysis
When trading you use technical analysis, and when investing you use analysis based on fundamental indicators.
- Profit
When investing, profits depend on the aggressiveness of your portfolio. 30% per year is considered a high return.
When trading, profit is not counted per year, but per trade. The more successful transactions the trader makes, the more effective his work.
- Risks
Trading is much more risky than investing. It is possible to lose all the money in trading in a few seconds.
There are ways to keep your money safe:
For trading: it is a stop loss mechanism. For Investing: Diversifying your portfolio.
- Time
Investing takes time at the initial stage, the stage of researching the company, a few hours a week will have to be spent to decide if the company is suitable for long-term investing.
In trading, you will need much more time, you need to be fully involved in the market to understand how the current situation and news background change, because that is what price fluctuations depend on.
