8-10 min read
Target Audience – Beginner
|Before I congratulate you on taking a plunge in stock market, I must ask you|
Are you ready to lose your invested money in one heap and start again and never breathe a word (not literally) about your loss?
If you hear yourself saying NO, please understand you are still NOT Ready for stock markets
If you heard YES, read further!!
Time is to congratulate yourself on the idea that you finally took a decision to venture into stock market. You have crossed a huge barrier which restricts millions of people to potentially earn more money.
Congratulations aside, Don’t just leave your job/studies by getting too excited about the idea of earning more money and jumping into stock market full time.
|The idea of jumping full time into stock market has destroyed many people as compared to enriching few of them|
|Before you say b**ls**t, No, I’m not saying that you shouldn’t do it full time. Go through one full bull and bear cycle before considering it seriously.|
The full journey will give you insights which no Book, Blog or a person can. The journey is unique and you have to develop your own strategy to master the markets
What i can do for you. I can help you through this journey when doubts creep in and you need a bit of hand-holding.
|So whats the starting point? Get on-board and lets start the journey|
By definition trader is the person who is engaged into buying or selling goods, currency or shares
So who is investor then-
By definition — a person that puts money into financial schemes, property, etc. with the expectation of achieving a profit.
Its pretty confusing and it seems both terms are interchangeable.
|Ok, Ok , have you said, its about shareholding duration. |
If a person buys or sells a share within a year, a month or a day, he is referred as trader. Investor is someone who keeps share for more than a year before he sells it.
So its partially true but largely false.
|Before you kill me, Lets come to the point and see from the viewpoint of stock markets.|
Broadly a person who is engaged in selling and buying shares based on technical data is called Trader while a person who is engaged in buying and selling shares based on fundamental data is called Investor.
Since technicals (moving average, candlestick etc) of a stock can change on daily, weekly and monthly basis and so on, hence the underlying assumption on which shares are bought remains valid for a shorter time period. Accordingly the person is engaged in buying and selling too frequently.
On the other hand, Fundamentals (earning, profit, cash flow etc) of a company change slowly over a period of time. A company can not become bad or good overnight or on weekly basis. e.g. it took Infosys 20 yrs to become overnight success story!!
Who’s best among Investor or Trader?
Both are best in their field and there is nothing wrong if you choose yourself as a trader or investor. But for the sake of increasing the probability of success in stock market, choose your domain and stick to it for a considerable period of time to hone your skills and make money.
Stock market is not a place for weak hearts anyway.
Closely look around among your peers, family, relatives, friends. There is a high probability that you are influenced by one of those saying that he’s milking the money in stock market and there is no better time for you to jump in. Did he tell you about losses he has made? NO?
Pretty high chances he’s a trader. I can put my neck on line for same.
|Everyone has made losses whether investor or trader. Stick it on your wall and curse this fact.|
|Should you try first trading or investing? Its up-to you, Who am I to tell you or for that matter anyone!! Its your money!!|
Being an investor increases your chances of success in longer run. It’s a low risk and high reward game as compared to trading which is a very high risk, very high reward game.
Trading involves overcoming your emotional behavior on real time basis and many of us fail at it (more on this in upcoming blogs) while investing gives you bit of time to take decisions rationally. No guarantee that you may pass 🙂
|So ponder for a while to choose your domain first before jumping to a new article on stock market. |
Also Read : Investor or Trader or S
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Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.